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SEC to Strengthen Corporate Governance, Enforcement

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  • SEC to Strengthen Corporate Governance, Enforcement

Securities and Exchange Commission (SEC), the country’s apex capital market regulator, has launched a major amendment to Nigeria’s Code of Corporate Governance for public companies. The code will empower the Commission to sanction companies that fail to comply with its directives.

The new amendment is expected to remove the persuasive provision that entitles companies to be put on notice, so they could seek redress. This will reinforce the mandatory nature of the code and the authorities of SEC to sanction companies without recourse to notice or redress.

A draft of the amendment to the code of corporate governance obtained at the weekend, currently undergoing rule-making process and exposure to stakeholders, will completely remove clause 1.3(d).

The clause states that whenever SEC determines that a company, or entity required to comply with, or observe the principles or provisions of this code is in breach, the SEC shall notify the company or entity concerned, specifying the areas of non-compliance or non-observance and the specific action, or actions needed to remedy the non- compliance, or non-observance.

According to the Commission, the provision is redundant in view of the mandatory nature of the Code. Companies are mandated to comply with its provision failing which they will be sanctioned without first requiring them to remedy the non compliance, or non observance.

The code empowers SEC to sanction individuals and companies that violate the code. Besides the stipulated fines, the code gives SEC unfettered power to apply “any other sanction” it “may deem fit in the circumstance”.

The Code of Corporate Governance for Public Companies, sets the minimum acceptable standards for quoted companies. Launched in 2003, the code was reviewed and re-launched in 2011, with several changes to reflect the current globally acceptable practices.

Some salient points in the code, include board composition, remuneration, independent director, shareholding disclosure, insider knowledge, meeting and whistle blowing.

Under the code, publicly quoted companies are required to include in their annual reports and accounts, a compliance report on codes of corporate governance. On board composition, the code requires that members of the board of directors should not be less than five, and that the board should comprise a mix of executive and non-executive directors, headed by a non-executive chairman.

According to the code, the majority of directors should be non-executive directors, at least one of whom should be independent director. The positions of chairman of the board and chief executive officer shall be separate and held by different individuals. To safeguard the independence of the board, not more than two members of the same family should sit on the board of a public company at the same time.

Also, the code requires that the remuneration of the Chief Executive Officer, as well as other executive directors should comprise a component that is long-term performance, and may include stock options and bonuses, which should however, be disclosed in the company’s annual reports.

Also, executive directors are not allowed to be involved in the determination of their remuneration. Executive directors should not receive sitting allowances or director’s fees paid to non-executive directors, it stated.

It said every public company is expected to have a minimum of one Independent Director on its board. An independent director is a non-executive director whose shareholding does not exceed 0.1 per cent of the company’s paid up capital and is not a representative of a shareholder that has the ability to control, or significantly influence management. In fact, an independent director must not have any contractual, or familiar relationship with the company.

Also, every quoted company is expected to disclose in its annual report, details of shares of the company held by all directors, including an “if-converted” basis. This disclosure should include indirect holdings. All directors are required to disclose their shareholding whether on a proprietary or fiduciary basis in the public company in which they are proposed to be appointed as directors, prior to their appointment.

The code provides that directors of public companies, their immediate families-spouse, son, daughter, mother or father; and other insiders as defined under Section 315 of ISA and Rule 110 (3) of the SEC Rules and Regulations, in possession of price sensitive information or other confidential information, shall not deal with the securities of the company where such would amount to insider trading as defined under the Investment and Securities Act 2007.

With regards to meeting, general meetings are expected to be conducted in an open manner allowing for free discussions on all issues on the agenda. Sufficient time should be allocated to shareholders to participate fully and contribute effectively at the meetings. The chairmen of all board committees and of the statutory audit committee should be present at general meetings of the company to respond to shareholders queries and questions. Notices of general meetings shall be 21 days from the date on which the notice was sent out. Companies shall also allow at least seven days for service of notice if sent out by post from the day the letter containing the same is posted. The notices should include copies of documents, including annual reports and audited financial statements and other information as will enable members prepare adequately for the meeting. The board is expected to ensure that all shareholders are treated fairly and are given equal access to information about the company;

The code also makes provision for whistle-blowing with every company required to have a whistle-blowing policy which should be known to shareholders, employees, contractors, job applicants, other stakeholders and the general public. It is the responsibility of the board to implement such a policy and to establish a whistle-blowing mechanism for reporting any illegal or substantial unethical behavior.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Sterling Bank Approves Audited Financial Statements for 2020

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Sterling Bank

Board of Sterling Bank Approves 2020 Audited Financial Statements

The Board of Sterling Bank Plc said it has approved the audited financial statements for the year ended 31, December 2020.

The lender said the approval was done at a meeting held on 23rd February 2021.

Details of the financial statements will be released upon approval of the Central Bank of Nigeria (CBN), Sterling Bank stated in a statement filed with the Nigerian Stock Exchange on Thursday.

It said “We are pleased to inform our shareholders and other stakeholders that the Board of Sterling Bank Plc at its meeting of 23rd February 2021 approved the audited Financial Statements for the year ended 31st December 2020 subject to the approval of the Central Bank of Nigeria (CBN).

“Kindly note that details of the Financial Statements will be communicated to you upon approval of same by the CBN.

“Consequently, the closed period for trading in the shares of the Bank by its insiders which commenced from 8th February, 2021 will continue until 24 hours after the Audited Financial Statements for the year ended 31st December, 2020 are released on the floor of the Nigerian Stock Exchange.”

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Banking Sector

CIBN, NIBSS Introduce e-Payment Certification Programmes

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NIBSS

CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Finance

Stanbic IBTC Offers Low-Interest Agric Loans

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Stanbic IBTC Bank

Stanbic IBTC Offers Low-Interest Agric Loans

Stanbic IBTC Bank Plc has reaffirmed its commitment to the growth of Nigeria’s agriculture sector by supporting farmers and other players in the agricultural value chain.

As the demands on agribusinesses change seasonally, the financial institution provides financing solutions for agricultural enterprises to suit their requirements.

A statement explained that the needs range from availability of resources, to farming equipment, as well as enhancement of seasonal cashflow, amongst others.

Stanbic IBTC Bank offers various low-interest credit facilities across the agricultural sector that will help clients to cushion the impacts of the Covid-19 pandemic.

Speaking on this, Head, Agribusiness, Stanbic IBTC Bank, Wole Oshin, said the agribusiness financial solution was geared towards ensuring that players in the agriculture space are not hindered by lack of finance.

He said: “The bank’s suite of agribusiness solutions minimises risks, ensures maximum control and optimises profits associated with international trade by making transactions smoother, simpler and safer for all parties involved.

“Some benefits of the Stanbic IBTC Agribusiness Finance include: availability of gap-funding for unforeseen financial needs, maintenance of cash flow and flexibility of repayment terms based on the type of funding. This facility is also versatile and can be utilised for funding resources, vehicles and farming equipment.”

Oshin noted that agricultural enterprises could access overdraft to finance their short-term cash flow and working capital needs.

“With quick and flexible processes, funds are available when needed and interest is paid only on funds utilised, not on the full amount on which the limit is set,” he added.

He further reiterated that the asset finance solution could aid in the financing of all farming vehicle and implement needs, with a wide range of packages to suit business’ cash flow and tax requirements.

“Vehicles and assets such as tractors, harvesters, irrigation equipment and so on, to enhance production,” he said.

Other available facilities are Business Revolving Credit Loan, Agricultural Production Loan and Medium-Term Finance.

These are suitable for grain farmers, individual farmers, groups and entities in the agricultural sector. Our loans are designed to accommodate the purchase of various agricultural inputs (like seeds, fertilizers etc), livestock, agriculture-related products and asset acquisition.

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