The Nigerian Code of Corporate Governance 2018: An Ethical Approach to the Nigerian Corporate Governance System?

Similoluwa Somuyiwa, Associate, Olaniwun Ajayi LP, Nigeria

The utility of good corporate governance practices cannot be overemphasised in any organisation, as sound processes evincing the principles of transparency, fairness and accountability have become imperative for national and global economies. Indeed, the benefits of adopting strong corporate governance ethics in a developing economy remain alluring today. In ensuring sound corporate governance practices in Nigeria, the Financial Reporting Council of Nigeria (FRCN) released the Draft Nigerian Code of Corporate Governance 2018 (the Draft Code), which seeks to, inter alia, institutionalise the highest standards of corporate governance best practices in Nigerian companies, and promote public awareness of essential corporate values and ethical practices that will enhance the integrity of the Nigerian corporate landscape. Perhaps the most impactful innovation of the Draft Code is its philosophy which takes the “Apply and Explain” approach of implementation. In precis, this approach requires companies to take responsibility for demonstrating how the specific activities they have undertaken best achieve the intended outcomes of corporate governance specifications in the Draft Code as opposed to the mandatory compliance approach adopted by the Nigerian Code of Corporate Governance 2016. This paper therefore examines the Draft Code’s philosophy and how it attempts to alter the corporate governance regime in Nigeria. The Nigerian corporate governance system, as we know it, focuses primarily on legal processes and structures to ensure compliance, whilst the ethical basis is seen to be absent. The difficulty with legal structures and its compliance mechanisms is that most corporate practices that have enraged the public are entirely legal. This paper seeks to explore the role of the Draft Code in shifting the focus from a structural perspective to an ethical perspective, and the viability of the Draft Code in sustaining the ethical values of transparency, fairness and accountability.

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Nigeria Corporate Governance Telecommunications December 2018 Vol.11, No. 45, Autumn 2018

Similoluwa Somuyiwa

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Similoluwa Somuyiwa is an Associate at Olaniwun Ajayi LP in the Firm’s Enterprise and Corporate Governance Practice Groups, where he provides legal advice on corporate structures, regulatory, and compliance matters. He has a deep understanding of the intricacies involved in complex commercial transactions and has consistently provided creative and commercially viable solutions tailored to his client’s needs. Having previously gained considerable experience advising clients on a wide spectrum of Finance and Capital market’s transactions as well as commercial disputes, Similoluwa has a firm grasp of intricate commercial and legal issues commonly faced by clients in the corporate sector. Similoluwa is a graduate of the University of Lagos and the Nigerian Law School; where he distinguished himself by receiving the Director-General’s prize having obtained a First Class Honors degree.

Olaniwun Ajayi LP

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Olaniwun Ajayi LP (OALP), established in 1962, is one of the oldest law firms in Nigeria, and for more than half a century, OALP has been at the forefront of commercial practice in Nigeria, thereby earning the reputation of being one of the leading law firms in Nigeria. OALP has consistently been ranked Tier 1 by all the leading international directories, including Chambers Global, IFLR 1000 and Legal 500. With almost eighty (80) lawyers and full service commercial law capabilities (balanced between intricate high-value litigation and complex big ticket transactions), we are active in all the major sectors of the Nigerian economy helping corporates, non-governmental organisations, government agencies, organisations and individuals achieve their goals. With the experience gathered over the years in advising businesses, foreign investors, financial institutions, governments and public sector bodies, the demands of major projects and clients’ needs are quickly appreciated. This puts OALP in an unrivalled position to proffer value-driven strategies and commercially relevant advice of the highest quality, not only in the law but also on “best practices”, thus weaving commercial, technical, tax, legal and practical realities in a seamless whole.

Nigeria Corporate Governance Telecommunications December 2018 Vol.11, No. 45, Autumn 2018