- FG Moves to Increase Representation on Discos’ Boards
The Federal Government has moved to increase its representation on the board of each of the electricity distribution companies in the country from one to three.
A statement made available to our correspondent in Abuja on Monday said that the increase of the representation of the government on the boards was to ensure good corporate governance, given government’s 40 per cent stake in the 11 distribution companies.
The statement issued by Head of Public Communications at the Bureau of Public Enterprises, Amina Othman, said the bureau summoned a meeting with the Discos last week in order to realise the bid.
According to Othman, the increment in the representation of government on the boards would be realised on or before July 15.
She said, “In furtherance of the move of the Federal Government to increase its representation on the boards of the Discos, the BPE summoned a meeting of the shareholders of the Discos on 26th June 2019.
“The bureau at the meeting reiterated the purpose of the reform and privatisation in the Nigerian power sector to address efficiency gaps and attract much needed private sector capital and management into the power sector. This reform was expected to transform the sector to meet the country’s electricity demand.
“Part of the requirements for the aforementioned reform was the entrenchment of a corporate governance structure, which provided for the core investor to have six directors and the bureau, one director. This was done to minimise the representation of the FGN on the boards and to grant the core investors sufficient control of the management and operations of the Discos.”
Othman added, “In view of the need to strengthen corporate governance of the companies, the Federal Government decided to increase its representation on the boards by two directors given its 40 per cent shareholding. The objective is to ensure transparency in their operations as well as improve their performance.
“The Director-General of BPE stressed the point that the process had been on for a long while and the delay in implementation by the Discos was not acceptable to the Federal Government.”