The Financial Reporting Council of Nigeria has outlined some of the risks of weak corporate governance in organisations.
The agency linked financial difficulties in many companies to weak corporate governance and warned that a situation where some individuals become more powerful than the organisations they represent would not enhance the economic growth of the country.
As a result, the Chairman, FRC, Hajiya Maryam Ladi-Ibrahim, said the concept of corporate governance was born out of the need to protect stakeholders’ investment and assets of public interest entities.
She spoke in Lagos at a one-day public hearing on the draft National Code of Corporate Governance for private and public sector entities.
She said, “As a matter of fact, the concept of good corporate governance is essential to the wellbeing of companies and their stakeholders. Until recently, corporate governance was not on the front burner in the public. Indeed, it was a phenomenally prominent in boardroom and academic environment.
“However, recent events in some parts of the world including our country, have brought to the fore the need for sound corporate governance in modern society. This is the reason for the insight into the public sector and not-for-profit organisations hitherto not in the public purview.”
According to Ladi-Ibrahim, enhancing the growth of the economy is the thrust of the proposed NCCG.
The FRC chairman reiterated that rather than build strong institutions for the benefit of the country, weak corporate governance structure in the public and private sectors had made some individuals more powerful than the country.
“Essentially, effective corporate governance requires a proactive and focused state of mind on the part of everyone charged with responsibilities as well as other stakeholders who must be committed to business success through the highest standard of responsibility and ethics,” she added.
The Chairman, Steering Committee, NCCG, Mr. Victor Odiase, said there was the need to move the country forward through the best practices that had been embraced round the globe.
He noted that the Anglo-Saxon system adopted in the nation, which presupposes that the market will be the ultimate mechanism as it is in the United Kingdom, was no longer effective in Nigeria.
One of the representatives of the Central Bank of Nigeria, Osaretin Oyewumi, warned the council not to allow any its recommendations to contradict the extant law governing organisations, noting that all legislations must work together and be cohesive.
Members of the private sector, professional bodies and other stakeholders did not approve some of the recommendations in the proposed corporate governance code.
They also said that a one-day public hearing was too small to deliberate on a crucial issue that had to do with corporate governance and the economy.

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