As part of measures targeted to safeguard the $68 billion investments in the telecommunications sector, the industry's Code of Corporate Governance has become mandatory.
Although it became mandatory by November 2016, the Nigerian Communications Commission (NCC), said non-compliance with the code henceforth would be met with heavy sanctions.
In an interaction with journalists on Monday in Lagos, NCC's Executive Commissioner, Stakeholders Management (ECSM), Sunday Dare, said Nigeria's telecommunications industry must be guided by global best practices, to sustain the investments and attract more, as such, the enforcement of the code becomes mandatory.
Dare, who explained that the Corporate Governance Code was introduced in 2012, which was then voluntary, said an agreement in the industry revalidated the code in 2014, and became mandatory by November 2016. "But henceforth, the Commission will monitor strict compliance with the code."
He noted that if compliance to the code was properly monitored, "probably what happened to Etisalat, now 9mobile, might not have happened." Dare, who alerted operators that compliance will be vigorously monitored, however said the code is not intended to micro manage any of the service providers.
According to him, while sanctions are inevitable for erring operators, "there will also be reward for good behaviour." He argued that such codes are not peculiar to the telecommunications industry, as it was already in place in the banking sector, stock market, and a host of others.
Also speaking, the Chairman, Code of Corporate Governance Working Group, Felix Adeoye, said most of the telecommunications companies have gone beyond just being a private firm, to becoming somewhat public, "because they are holding peoples' money. Some subscribers have up to N250, 000 Airtime on their phones, even above that. So, there must be constant check on them to ensure there is no abuse."
Meanwhile, at the sensitization programme on the code yesterday, the Executive Vice Chairman of NCC, Prof. Umaru Danbatta, said the code will still pass through some modifications, based on contributions made by stakeholders at the programme.
Danbatta said the issue of sanction is usually the last option, stressing that there have been situations where telecoms operators ignore laws, "sanctions are regulatory actions and usually the last resort. We shall continue to engage the industry, because the sector is critical to the survival of the economy."
To the Chairman, NCC Board, Senator Olabiyi Durojaiye, in his welcome address, the move is in line with the Federal Government Change mantra and the ease of doing business drive and is like the African leaders peer view mechanism and it is expected that the industry reaches a self-regulatory phase in the nearest future.
"The recent, rather unacceptable, events in the industry have also brought to the fore the need for Board Corporate governance and the commission has resolved to improve Economic Regulatory compliance and adherence to the Code of Corporate Goverance. As it is said, 'once beaten is twice shy'," he stated.
The NCC said it discovered significant deviations from the key principles contained in the Code, therefore, there was urgent need for all operators to fully align with these principles in order to ensure that the industry moved on the same trajectory.
Checks by The Guardian on the Code showed that compliance is mandatory for all licensees that meet one or more of a number of criteria. These are spread of operations of the licensee covering a minimum of three geo-political zones; turnover of the licensee is in excess of N1billion; the number of staff employed is in excess of 200, and where the licensee has a subscriber base of 500,000 or more.
In the area of tenure and re-election of directors, the code explained that to ensure continuity and injection of fresh ideas, a Director may serve on a board for a period of three terms of five years each. No director shall serve on any board for a period exceeding 15 years.
Subject to satisfactory performance and the provisions of the Companies and Allied Matters Act(CAMA), all Directors shall be submitted for re-election at regular intervals of five years. In order to guide decision of shareholders, names and sufficient biographical details of Directors nominated for re-election should be accompanied by performance evaluation statement and any other relevant information.
The Code also mandated that companies are expected to present a fair, balanced, understandable and transparent assessment of the licensee's position and prospects to external stakeholders.
"Boards should develop a corporate reporting model that is tailored to the needs of shareholders and other stakeholders.
Authors: All Africa