Enhancing Governance Practices In Nigerian Organisations

Effective governance practices are crucial for promoting transparency, accountability, and sustainable growth in organisations.
However, Nigerian companies face several challenges in implementing robust governance structures, including corruption, weak regulatory frameworks, and inadequate stakeholder engagement.
To address these challenges, organisations in Nigeria are adopting best practices in corporate governance. This includes establishing strong governance structures with clear roles and responsibilities, promoting transparency and disclosure, and ensuring effective stakeholder engagement.
Experts emphasised the need for continuous training for board members and management on corporate governance and financial reporting standards.
The Nigerian corporate sector has undergone different phases in its effort to develop and redefine the corporate landscape so as to inculcate good corporate governance in Nigeria. In 2003, the Code of Best Practices on Corporate Governance in Nigeria (the 2003 SEC Code) issued by the Securities and Exchange Commission, was the first corporate governance code to be issued by any regulator in Nigeria, and its application was extended to all public companies registered in Nigeria.
In 2011, the SEC issued the Code of Corporate Governance in Nigeria 2011 (the 2011 SEC Code) to address the weaknesses of the 2003 SEC Code, and to improve the mechanism for its enforceability. In furtherance of the powers under the Financial Reporting Council of Nigeria (FRCN) Act that the FRCN issued the three-tiered National Code of Corporate Governance in 2016.
Explaining the role of its board, Dangote Sugar Refinery in its annual report said, “The Board is the highest governing body in the Company with oversight of the strategic goals of the Company. The Board considers the long-term and short-term strategies of the company and monitors the implementation by management.
“The primary responsibilities of the Board are the performance, oversight of affairs and direction of the company. It is responsible for defining the Company’s strategic goals and deploying the relevant personnel for the attainment of these goals. In addition, the Board has supervisory oversight in ensuring that the Company’s affairs are run in compliance with the law, its Articles of Association. and principles of good corporate governance.”
It added that “the Board defines the vision, goals, objectives and strategic priorities of the Company, monitors the integrity of financial and internal control policies and management information systems. It presents the audited financial statements to the shareholders and ensures the accuracy and efficiency of the accounting and financial management.”
To enhance governance practices, Nigerian organisations should:
Establish Strong Governance Structures: Clear roles and responsibilities, regular board evaluations, and succession planning.
Promote Transparency and Disclosure: Adopt international best practices in financial disclosure to enhance transparency.
Ensure Effective Stakeholder Engagement: Regular stakeholder meetings and reporting to build trust and accountability.
Implement Robust Risk Management Frameworks: Identify, assess, and mitigate potential risks.
By adopting these best practices, Nigerian organisations can promote sustainable growth, transparency, and accountability, ultimately contributing to the country’s economic development.