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National Code of Corporate Governance now effective

Sanity may be underway in many corporate establishments as the much awaited National Code of Corporate Governance 2016 sponsored by the Financial Reporting Council of Nigeria (FRC) has become effective this month.

The Code comes in three parts, which are, Code of Corporate Governance for the Private Sector, Code of Governance for Not-for-Profit entities and the Code of Governance for the Public Sector. They all collectively combine to form “National Code of Corporate Governance 2016”

A release from FRC today stated that the Code of Corporate Governance for the Private Sector is mandatory while that of  the Not-for-Profit entities will be operated on the “Comply or Justify non-compliance” basis in a manner similar to the United Kingdom’ s Code.

The statement however stated that the Code of Governance for the Public Sector will not be applicable immediately until an executive directive is secured from the Federal Government of Nigeria.

This moratorium for the Public Sector Code is attributed to the fact that the enabling laws that set up most government establishments already have diverse governance structure that will need to be harmonised by a common legislation.

The statement read in parts: “In accordance with Section 50 of the Financial Reporting Council of Nigeria Act, 2011, which among other things requires the Directorate of Corporate Governance to develop the principles and practices of Corporate Governance applicable in Nigeria, the Council hereby releases the National Code of Corporate Governance effective 17th October 2016”.

“The Code of Corporate Governance for the Private Sector is mandatory; The Code of Governance for Not-for-Profit entities is “Comply or Justify non-compliance”; and The Code of Governance for the Public Sector will not be applicable immediately until an executive directive is secured from the Federal Government of Nigeria. This is due to the fact that the enabling laws that set up most government establishments already carry some form of governance structure that will require an umbrella legislation to unify the different provisions of those laws to synchronise with this Code.