A new joint report by the Association of Chartered Certified Accountants (ACCA), and KPMG, has identified certain elements within the Organisation for Economic Co-operation and Development (OECD) code of corporate governance principles quotes that were not featured in a number of markets including Nigeria. Consequently, it urged regulators to enhance their codes and attract investment inflow into the country.
OECD is a document/instrument drafted to capture a majority of the key corporate governance requirements for a market. It is typically endorsed by the government or the stock exchange regulator, and is generally applicable to publicly listed companies. It may vary in strength from voluntary, ‘comply or explain’ or mandatory.
Although the report observed that one-third of the countries studied have recently reviewed their corporate governance codes, but it maintained that it was high time others reviewed and made improvements, given the impetus of the new OECD principles, and the need to encourage more foreign direct investment.
The report titled: ‘Balancing Rules and Flexibility for Growth’, which focuses on 15 countries across Africa, and examines the corporate governance requirements for listed companies, revealed that Africa received only 3.1 per cent of the world’s foreign investment in 2015.
It explained that strong corporate governance signals governments’ commitment to creating credible arrangements for investors, taking their rights into consideration, and providing support mechanisms that safeguard their investment.
It added that sound corporate governance practices could be helpful in obtaining new and much-welcomed investments in Nigeria, and Africa at large.
Addressing journalists in Lagos last week, the Senior Manager, Risk Consulting, KPMG in Nigeria; Gloria Ojo, said: “We also noticed that certain elements within the OECD quotes were not featured largely in a number of markets including Nigeria. This relates with things like requirement to allow shareholders to consult each other on the basis of their shareholders right; we did not see a lot of documentation of this on the quotes.