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FRC Nigeria to Unveil New Code of Corporate Governance in Q1 2024

Executive Secretary /CEO of the Financial Reporting Council of Nigeria (FRC), Rabiu Olowo has unveiled a four-point strategic agenda to transform and re-launch the council for the global audience.

The FRC chief who made this known at a stakeholder roundtable in Lagos on Wednesday, said the agenda is hinged on what he coiled ‘DOSE Viz: D–Digitisation, O-Operational Excellence, S–Stakeholders Engagement and E-Enforcement’.

“The purpose is to set high standards of corporate governance, reporting, auditing and holding to account those responsible for delivering them. The significance of this is that FRC is integral to the roadmap of providing confidence to investors as Nigeria embarks on a journey towards renewed hope where the strength of our businesses and government institutions is of utmost importance to our future success as a nation.”

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He revealed that FRC has witnessed evidence where numerous entities and government institutions are falling short of the high standards expected under the FRC Act 2011, thus, the onus rests on its shoulders to transform the FRC into a new, robust, independent, and high-performing regulator comparable globally.

He stressed that the bedrock of the transformation agenda of the Council going forward would be to ensure maximum compliance with the FRC Act 2011 (as amended), and other statutory instruments released by the Council.

“FRC intends to give full credibility to any financial statements coming out of Nigeria in a way that investors can rely on the information in the statements. We shall see a new FRC that will be firm and fair in carrying out her mandate; hold corporates and individuals accountable; restore confidence in corporate reports and governance in the Nigerian economy to enhance the renewed hope of President Bola Ahmed Tinubu.”

He reiterated the council’s resolve to establish a corporate reporting academy in the next year in collaboration with all financial institutions in the country. More so, in other to curb incessant malfeasance, he added that President Tinubu would unveil the code of corporate governance for the public sector in the first quarter of 2024.

“As we begin to review codes of corporate governance for both sectors, we shall also engage in intensive capacity building of our personnel and work hand in glove with professional bodies and educational institutions to deliver on mandate, because we are committed to restoring the image of the council.”

On digitisation, he posited that its transformation agenda is hinged upon the use of technological tools to enhance our activities.

“FRC will leverage technology to streamline its operations and improve efficiency. This includes the use of technology in the filing and analysis of financial statements, corporate governance reports and other corporate filings, as well as the implementation of online reporting systems to facilitate timely and accurate submission of financial statements.

“Our focus will be to ensure efficient and effective delivery of flawless service to the stakeholders through digitalization, capacity building, advocacy and thought leadership. Our processes will be automated to ensure quick and timely responses.”

On operational excellence, he said FRC has planned to achieve its target by revitalising all the functional directorates to achieve maximum effect. Thus, going forward, FRC would aim to achieve the highest level of operational excellence comparable to what is obtainable in other jurisdictions around the world, and would achieve this by continuous Improvement: establish and operationalise new corporate governance for the public sector and not-for-profit sector.

“Learning and development of staff will be a priority as well as the establishment of all the Statutory Directorates Section 23 of the FRC Act 2011 (As amended) stipulated 7 directorates for the council. We’re pushing for Sustainability Reporting and full Implementation of Audit Regulations 2020.

“The council is engaging the relevant stakeholders for the establishment of the Directorate of Valuation Standards and the Directorate of Actuarial Standards.”

On stakeholder engagement, he affirmed that, in line with the Transformation Agenda of the FRC, the council will lead initiatives to improve its stakeholders’ engagements, partnerships, alliances and strategic collaborations with local stakeholders (governments, primary regulators, professional bodies and associations.

On enforcement and compliance: the purpose, he said is to” ensure that entities comply with financial reporting standards, corporate governance codes and other corporate requirements in Niger. This will be achieved throughour Inspection Specialist Program (ISP) which aims to drive the effective monitoring and inspection of annual reports and financial statements of Public Interest Entities to ensure accuracy, transparency, and reliability. Through the ISP, we will critically scrutinize and analyze a substantial amount of the corporate reports in Nigeria to engender investor confidence in financial statements.

“Over the years, the council has through its inspections and monitoring activities observed a relative non-compliance with the FRC Act and applicable corporate reporting requirements. fact, it has been observed that a significant number of entities claiming not to be PIEs do not file their financial statements with the Council.

“Majority of government organisations do not prepare and file their financial statements at all or use inappropriate financial reporting framework. They claim to have adopted IFRS instead of IPSAS and vice versa. This unacceptable situation has to be corrected immediately during my tenure.

“There must be a timely submission of financial statements payment of annual dues by individual professionals, firms, and Public Interest Entities (PIEs) within 60 and 120 days respectively. The council will apply appropriate penalties for the failure of any individual, firm or PIE as laid down in the Act.

“Henceforth, this position will be firm in enforcing appropriate sanctions on PIEs who fail to comply with the FRC Act and other statutory instruments. There is a need is a focus on the environmental impact assessment of human activities.

“In cases of non-compliance or irregularities, the council takes enforcement actions such as issuing warnings, or penalties, suspension and/or deregistration of professionals as well as serving a notice for the withdrawal and restatement of erring entities’ financial statements”

He hinted on the Accounting Development Tool (ADT), which according to him, the c ouncil is collaborating with the United Nations Conference on Trade and Development (UNCTAD) on the implementation of the Accounting Development Tool in Nigeria.

The objective of ADT is to assist policymakers and other stakeholders in identifying gaps and priority areas towards attaining international standards and best practices and help to assess and determine our country’s need for technical assistance to build an accounting and financial architecture that improves transparency & financial stability, whilst strengthening international competitiveness and economic development.

“However and in line with our transformation agenda, council has taken it as a priority to have the full complements of the Directorates in 2024 as stipulated in the DRC Act 2011.

“The council will be taking huge steps in 2024 on sustainability reporting due to the emerging issues and nature of the standards. Nigeria, through FRC, aims to be part of the global leaders in sustainability reporting.

“We have set a 5-year plan which will include: The issuance of a roadmap report for sustainability reporting in Nigeria before the end of the first quarter of 2024; and setting up a Directorate of Sustainability reporting standards as empowered by virtue of section 24 of the FRC Act 2011 (as amended)”

Meanwhile, stakeholders from SEC, FIRS, NGX, EFCC, Bureau of Public Enterprise, CBN, public affairs analysts and others frowned at what they called ‘inter-agency rivalry’ within the military and MDAs, which has caused more damage and impeded the attainment of the overall government objectives for good governance.

They urged the financial regulator to institutionalised every resolution reached at the summit and as well embark on regular and periodic engagement with regulators and other critical stakeholders.

“Institutionalisation of corporate governance in the public sector of the Nigerian economy is fundamental towards sound policies and economic growth” they asserted.

Source: Zawya