Immediate past Chairman of Nestle Foods Nigeria, Olusegun Osunkeye has criticised the Code of Corporate Governance released by the Financial Reporting Council of Nigeria (FRCN).
Osunkeye, who is also a former chairman of Nigeria Accounting Standard Board (NASB), the forerunner to FRC, stated this at the 2016 Annual Summit and Dinner of the FRCN.
Specifically, Osunkeye stated that the code is unfriendly to businesses and cited several sections of the Code that conflicted with or sought to amend provisions of the Companies and Allied Matters Act (CAMA).
Speaking in Lagos as chairman of the opening session of the event, he said: “Section 246 of CAMA provided for a minimum of two Directors as against section 5.4 of the Code which provided for a minimum of eight directors.
“Besides contradicting the provisions of CAMA, it is a needless requirement which did not consider the avoidable financial burden. Section 7.3 of the Code provides that 75 percent vote of the full board is required to override the dissenting view of majority of Independent Non-Executive Directors, INEDs.This is contrary to section 263(2) of CAMA that says questions at board meetings shall be decided by a majority of votes and in case of equality, the Chairman has a second or casting vote.
This is similar to the conflicting provisions in sections 8.12.2; 8.13.2; 8.14.5 and 8.15.2 of the Code against section 263 (6) of CAMA which empowers each board committee to elect a Chairman of its meeting.
“Since there is an ongoing attempt to amend CAMA, Financial Reporting Council, FRCN, cannot and should not usurp the powers of the National Assembly.”
Osunkeye submitted that the Code should be amended in conformity with the provisions of CAMA in order for it to be friendly to businesses.