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| Chief Executive Officer (CEO) of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema |
The NSE chief added that it also help to encourage private
financial flow, wasteful spending and consolidates democracy.Besides, he said
investors’ confidence in the Nigerian capital market has remained challenging
based on perceived inadequate disclosures, corruption and poor understanding of
fiduciary responsibilities on the part of directors.
Speaking at the formal inauguration of Institute of
Directors Nigeria (IoD) independent director’s register in Lagos, Onyema, said
the relevancy and importance of good corporate governance practices in public
companies, whether listed on an exchange or in a private capacity, cannot be
overstated.
Accordingly, he said with the launch of the independent
directors’ register by IoD and its associated stringent requirements for entry,
we hope to see improvements, adding that the Exchange will continue to promote
sound business ethics and principles as we look to grow Nigeria’s capital
markets, and ultimately Africa’s largest and most enterprising economy.
He said it requires checks and balances on the power and
rights accorded to shareholders and the society at large, stating that good
corporate governance can also drive a country’s ultimate fortunes from an
economic standpoint.
According to him, empirical evidences confirms that high
levels of transparency have been found to be associated with lower country risk
premiums and costs of capital, as well as higher trading volumes or liquidity.
“Companies with low corporate governance standards have been
shown to experience higher capital costs and greater risk premiums on their
bonds and other capital raising offerings,” he said.
He added that governance deficiencies have been shown to be
associated with increased probability that takeovers may not be successful,
with a greater probability of a decline in a company’s intrinsic value.
His words: “In the selection of independent directors, we
must not look simply for high profile names. The issue is not of lending a
brand but having someone with an independent state of mind. In an economy fired
by innovation, our biggest threat is obsolescence. Periodic training of
Directors is a must and unfortunately there are few courses designed primarily
for this purposed.”
Conscientious independent directors would do well to get
some due diligence done on the company’s governance practices especially if
they are invited to join controlled companies.
In his remarks, Former High Commissioner to the United
Kingdom and Chairman, Board of Directors of SystemSpecs, Dr. Christopher
Kolade, said an ideal independent director is someone who has a demonstrable
track record of success in business and who from an organisational viewpoint
has intellectual, financial and political autonomy with a deserved reputation
for open articulation of own views when required.
GUARDIAN
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