The Nigerian Government recently drafted the Corporate Governance Guidelines 2023, which will help promote good corporate governance across sectors in Nigeria’s economy.
The SME-CGG 2023 will enhance the “investability” of MSMEs and increase their access to capital, talent management, market fit, and job creation according to the Financial Reporting Council of Nigeria (FRC).
This was disclosed by Ambassador Shuaibu Adamu Ahmed, Executive Secretary, Financial Reporting Council of Nigeria (FRC), after the draft exposure consultation on Small and Medium Enterprise Governance (SME-CGG) organised by Financial Reporting Council (FRC) and the United Nations Global Compact Network Nigeria (UNGC-NN), shared with Nairametrics.
Ambassador Ahmed revealed that Proper implementation of such a framework through the SME-CGG 2023 will enhance the “investability” of MSMEs, he added:
- “It will increase their access to capital, talent management, market fit, and job creation.
- “The Guidelines serve as recommendations and benchmarks for entities at different stages of development, and implementing good corporate governance practices is a gradual process that will take the collective engagement of all stakeholders.
The Executive Secretary also extended a hand of partnership to SMEs and the wider private sector to work through collective action to promote and improve the business environment in Nigeria.
He noted that the broader mandate of the Financial Reporting Council is to promote good corporate governance across sectors in Nigeria’s economy, the statement read:
- “Ambassador Ahmed recognized the journey to raise public awareness of corporate values and ethical practices across entities, noting FRC’s decade-long development of Codes of Corporate Governance for the public, private, and non-profit sectors, notably bringing about the publication of the 2018 Code of Corporate Governance.
- “He stressed the importance for technical sessions, support, consultations, and exposure drafts to ensure widespread stakeholder acceptance and embracing of the newly issued Guidelines.
Ambassador Ahmed urged that, MSMEs as crucial agents of economic prosperity for Nigeria, emphasizing their contribution to employment, GDP, and global competitiveness, adding that it is imperative to provide a robust corporate governance framework for MSMEs to enhance their growth, financing, and performance.
Mr. Titus Osawe, FRC’s Director of Corporate Governance, noted that previous attempts to develop and issue Codes of Corporate Governance to strengthen good corporate governance practices for the public, private, and non-profit sectors met resistance due to inadequate stakeholder engagement as well as the limited and insufficient exposure period that resulted in the lack of acceptance by stakeholders.
To avoid this past mistake, he emphasised the wide outreach of the SME-CGG exposure that involves in-person consultations and comments from Business Membership Organizations across different geopolitical zones. Also, ensuring online accessibility for public comments by uploading the SME-CGG on Council’s website.
Ms. Ayotola Jagun, Board Member and Anti-Corruption & Governance Thematic Lead at UN Global Compact Network Nigeria, called the first phase of the Guideline’s implementation a journey and a process, she added:
- “The strength of the Guidelines is its incentives-based approach to encourage behaviour change rather than mandate nominal compliance.
- “The focus is not on increasing the administrative burden. Instead, it is to help companies become more sustainable.”
- “ The standardization the Guidelines create, will enable investors and decision makers to identify those SMEs who are on the right Governance and Sustainability trajectory.
At the conclusion of keynote addresses, stakeholders called for the need for accessible language in the Guidelines and the inclusive engagement of stakeholders, a proper segmentation of the stakeholders to whom the SME-CGG 2023 applies, a support system and platform for monitoring compliance with the SMECGG and encouraged a risk-based framework for SMEs adopting the SMECGG.