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Revisiting the Code of Corporate Governance for Nigerian telecom industry

By Cyril Ilayah The entrenchment of good corporate governance standards and practices has continued to gain global recognition and acceptance as the bedrock for corporate success and business sustainability. Thus, the need for compliance to corporate governance code in an industry like the Nigerian telecom industry, which is an enabler of other industries cannot be […]


The post Revisiting the Code of Corporate Governance for Nigerian telecom industry appeared first on Furiousforum.com.




By
Cyril Ilayah





The
entrenchment of good corporate governance standards and practices has continued
to gain global recognition and acceptance as the bedrock
for corporate success and business
sustainability. Thus, the need for compliance to corporate governance code
in an industry like the Nigerian telecom industry, which is an enabler of other
industries cannot be overemphasized.





The telecom industry is re-engineering the Nigerian economy, helping other industry like the manufacturing, commerce, transportation and governance to work effectively. In fact, with the aid of telecommunications, jobs are being created directly and indirectly even in the gaming industry, with the likes of Betway promotions helping the youths to be gainfully engaged.





The industry
has matured and have prospects for more growth, compared to 2001 when the
telecom industry was liberalized. Recent information from
the Nigerian Communications Communications (NCC) shows that the Nigerian
telecom industry has really experienced massive growth and development from every
indication, contributing N1.9
trillion,
which represents 10.11 percent to the country's Gross Domestic Product (GDP).





Prof Fabian Ajogwu (SAN)




According to the figures reeled out by the telecom regulator, investment in the Nigerian telecom industry presently stood at $70 billion. In the voice segment, Nigeria has 173 million lines as of March 2019, which translates to teledencity of 91 percent.





In broadband, Nigeria has recorded a
remarkable penetration of 32.48 percent as at December 2018. Thus, surpassing
the strategic national broadband plan, which prescribed penetration of 30
percent by the end of 2018. In March 2019, broadband penetration stood at 33.22
percent compared to 8.50 percent in 2015.





In 2001, Nigeria has less than 500
connected telephone lines; the Internet was also a scarce resource.





But today, the story has changed,
with calls for more investment
becoming more compelling, given that the telecom industry is a capital
intensive.   No industry with these
characteristics such as ours can be sustained over a long period of time
without a corresponding injection of more investment,   the Executive Vice
Chairman of NCC, Prof. Umar Danbatta argued, while giving a welcome address at
a recent event.





Hence, there are concerns from
stakeholders for the need to revisit the Corporate Governance Code for the
telecom industry officially launched by the Nigerian Communications Commission in
July 2014.





Speaking last week at the Nigerian Telecom
Leadership Summit at Eko Hotel in Lagos, Prof. Fabian Ajogwu (SAN), argued
that  the Code
of Corporate Governance will ensure that the highest
standards of industry transparency,
due process, data integrity, disclosure requirements, accountability, and ethics are maintained without impeding enterprise and innovation.





Arguing from the angle of law, Prof.
Ajogwu, who made a presentation titled:   The role of the mandatory code of
corporate governance in the Nigerian telecom industry', explained that the code
adopt the principles, standards and laws laid down in existing statutes in
Nigeria, particularly the Companies and Allied Matters Act (CAMA), and the
Nigerian Communications Act.





 This Code adopts the provisions of
CAMA as it relates to directors and officers responsibilities in the licensee as
baseline where the stipulations of the statute are not declaratory.In the event
of conflicts between the provisions of this Code and provisions of other
Regulations, the stricter provisions should be applied,   he emphasisied.





He insisted that the application of
the Code must be made mandatory for all licensees that meet criteria such as spread
of operations of the licensee covers a minimum of 3 geo-political zones; turnover
of the licensee is in excess of one (1) billion naira;  the number of staff employed is in excess of
200 and where the licenseehas a subscriber base of 500,000.





The Nigerian Communications Commission had launched
the Code of Corporate Governance for the industry with the intention to
present to present a win-win model of inter-relations predicated on openness,
accountability, transparency
and integrity.





Governance practices have evolved over time to stem
the tide of emerging risks in
managing businesses and to safeguard investor capital and enhance stakeholder values. In inception, compliance with the
provisions of the Code was made voluntary,aimed at availing sector operators' adoption
and adaptation over time.





Prof. Umar danbatta, Telecom
Prof. Umar Danbatta, EVC of NCC




 We made the Code of Corporate Governance voluntary in the first instance. However, after two years of adoption of the Code, it became imperative to carry out a study to ascertain the level of adoption and compliance with the provisions of the Code,and to have key elements of the Code reviewed in the light of observed peculiarities and current international best practices   the EVC of NCC, Prof Umar Danbatta said.





He disclosed
the outcome of the survey revealed that there were significant deviations from
the key principles contained in the Code. A situation he noted calls for the urgent
need for all operators to fully align with these principles in order to ensure
that the industry moves on the same trajectory.





 It is
against this background that it became imperative to move from a voluntary to a
mandatory regime,   he added.





To consolidate
on the gains of the telecoms sector to the nation's economy and gain stronger
stakeholders'support, the revised Code of Corporate Governance would not only
assist in enhancing business prosperity and corporate accountability, but would
help promote friendly investment climate.





It seeks to foster good
corporate governance practices by
Telecommunications entities (Licensees)operating
in Nigeria.
The provisions of the Code are also based on international best practices.





Other features of good corporate governance are, it provides
proper incentives for the board and management to pursue objectives that are in the interests
of the Company
and its shareholders and should facilitate
effective monitoring. It is believed that this Code of Corporate
Governance will facilitate pursuit of objectives that are
in the interest of the licensee, shareholders and other stakeholders in the industry.


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Source: Revisiting the Code of Corporate Governance for Nigerian telecom industry,Here On Furious Forum



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Thats nice


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