Unifying Nigeria's Sectoral Corporate Governance Regimes Through A National Code Of Corporate Governance For The Private Sector

Additionally, the Code appears to make it permissible for the Board to appoint directors of a company, subject to ratification by the relevant industry regulator(s), where applicable[24]. This is contrary to the provisions of CAMA, which mandatorily preserves the powers to appoint directors to members at an Annual General Meeting[25]. Although, in cases of casual vacancies on the Board arising out of death, resignation, retirement or removal, CAMA permits the Board to appoint directors to fill such vacancies, such appointments are still subject to ratification at the next Annual General Meeting[26].

Also, the Code specifies that remuneration of the MD/CEO shall be determined by the Remuneration Committee[27]. This is clearly at variance with the unequivocal provisions of CAMA which prescribes generally, that the remuneration of directors shall from time to time be determined by the company in general meeting[28]; whilst the remuneration, of the Managing Director, shall be as determined by the Board[29]. Furthermore, the Code appears to limit the powers of the Remuneration Committee to make “recommendations” to the Board to only instances where compensation payable to executive directors and senior management employees for any loss of office or termination of appointment is being determined. This is to ensure that such compensation is consistent with contractual terms, fair and not excessive[30].

Clearly, from the foregoing, it would appear that the Code is diluting the powers of the Board (as we know it) in relation to certain matters, and giving such powers to committees of the Board.

The Code makes it mandatory for public companies to have a Board Audit Committee (in addition to the Statutory Audit Committee prescribed by CAMA)[31], which shall meet at least once every quarter[32]. In addition, every private company to which the Code applies is also expected to have a Board Audit Committee[33].

Since both the Statutory Audit Committee and Board Audit Committee have certain similar functions and are empowered to make recommendations to the Board:

• either independently or jointly, where they co-exist, on the appointment and re-appointment and removal of external auditors[34];

• on the removal of the head of the internal audit where they co-exist[35];

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[24] Section 9.4 of the Code specifically provides that “The nomination Committee shall recommend names of prospective candidates for consideration for directorship positions. The board shall appoint directors subject to ratification by the relevant industry regulator(s), where this is applicable”.
[25] Section 248 of CAMA
[26] Section 249 of CAMA
[27] Section 6.3.8 of the Code
[28] Section 267(1) of CAMA
[29] Section 268 of CAMA
[30] Section 8.13.5 of the Code
[31] Section 8.14.3 of the Code
[32] Section 8.14.6 of the Code
[33] Section 8.14.10 of the Code
[34] Section 19.1 of the Code
[35] Section 17.15 of the Code