The Nigeria Employers’ Consultative Association (NECA) on Tuesday criticised provisions in the recently suspended Code of Corporate Governance of the Financial Reporting Council (FRCN).
According to NECA, there is no justification for the mandatory ‘cool-off’ period set for Managing Directors before becoming Chairman, “amongst other unpleasant provisions to business in the code”.
Speaking in Lagos, the Director General of NECA, Mr. Olusegun Oshinowo said: “There is no justification for the restriction on MD/CEO becoming the Chairman of the same company until after the cool off period of 7 years as stated in section 6 of the Code for Private Sector.”
Oshinowo said: “Some companies are formed by one or two shareholders with the vision of what they intend to achieve. What stops such investor that has served meritoriously as the MD/CEO from becoming the Chairman of the company upon retirement if so appointed by the board based on clear criteria?”
He counselled the FRC to “go back to the drawing board to ascertain best practices from other climes where the trend was borrowed as there are multinational companies whose MD/CEOs were appointed as Chairman by the board immediately upon retirement and no scandal was associated with such appointment. What is important is that structures must be put in place to check the powers of the various officers of the company and not regulations that should target individuals”.
