A review of the revised draft code of Corporate Governance for banks in Nigeria
In continuation of its efforts at building a robust banking industry, the Central Bank of Nigeria (CBN) issued an Exposure Draft Code for Banks in Nigeria (the Code) in July 2012. There have been mixed reactions from public analysts, commentators, investors and operators. The general consensus is that the review of the existing code is long overdue in view of the significant developments that have taken place in the financial services sector in the recent past. Furthermore, the existing Code appears to have outlived its immediate objective which was the provision of guidance to banks that emerged after the consolidation exercise of 2005.
In introducing the draft code, the Central Bank of Nigeria stated that the essence was to “strengthen governance practices, eliminate perceived ambiguities in, and align the Code with current realities and global best practices”. It is in the light of the foregoing that the draft Code proposes to introduce provisions aimed at strengthening the financial services sector. We note that some of the provisions replicate those of the SEC Code of Corporate Governance for Public Companies, an apparent indication of the need to have a unified Code of Corporate Governance.