Corporate Governance and the 2018 Nigerian Code

A set of practice questions based on the lecture about corporate governance definitions, legal frameworks in Nigeria, and key points from the Nigerian Code of Corporate Governance 2018.

What is the definition of corporate governance provided in the transcript?

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled, outlining how rights and responsibilities are distributed among participants.

Who are the participants among whom rights and responsibilities are distributed in corporate governance?

The Board of Directors, Management, Shareholders, and other stakeholders.

List the domestic legal frameworks for corporate governance in Nigeria mentioned in the notes.

CAMA twenty twenty (Company and Allied Matters Act twenty twenty), Company's regulations 2021, Security exchange rules, Financial reporting council act as amended, Nigerian code of corporate governance 2018, Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014, PENCOM Code 2018, Code of Corporate Governance for Insurance Companies 2,009, Code of copy governance for public companies in Nigeria 2011, and Code of copy governance for the telecommunication industry 2016.

What are the three international legal frameworks for corporate governance identified in the transcript?

1. The Calbury report, 2. The UK combined code of corporate governance, and 3. The United Nations global compact on business human rights.

What is the first key point from the Code of Corporate Governance 2018 regarding the chairman and the CEO?

The position of the chairman of the board and the managing director or the CEO should be separate so that no person can combine both positions.

What is the 2018 Code's rule regarding directors and competing companies?

Directors should not be members of boards of competing companies, such as a director of Dangote Cement being a member of the board of BUA Cement.

What restrictions are placed on the Chairman of the Board regarding committees?

The chairman of the board should not serve as chairman or member of any board committee.

What is the required 'cool off period' before a former MD or CEO can become the chairman of the board?

A cool off period of $3$ years should be adopted.

Under the 2018 Code, what is the executive status and day-to-day role of the chairman?

The chairman should be a non-executive director and should not be involved in the day-to-day running of the company.

Can an MD or CEO serve as a director in a different company?

Yes, the MD or CEO may be appointed as a non-executive director in a different company, provided they are not involved in the day-to-day running of that other company.

Which specific committees must an executive director, MD, or CEO NOT be a part of?

Any committee responsible for remuneration, audit, nomination, or governance.

What is the minimum frequency for board or committee meetings?

The board should meet at least once every year.

Why is it important for every director to attend all board meetings?

Because attendance is a criteria for reelection.