Nigeria Petroleum and Gas News

THE Nigerian Stock Exchange (NSE) has criticized oil companies operating in Nigeria for failure to comply with tenets of good corporate governance.Speaking at a one day workshop on Code of corporate governance in Lagos last week, Director-General of the NSE, Dr. (Mrs) Ndi Okereke Onyiuke said: “Oil companies are the most defaulting entities with regard to corporate governance. The oil sector is not properly and effectively controlled. The Department of Petroleum Resources (DPR) is not policing oil companies effectively. For the financial sector, it is the most regulated.”
To this extent, she advocated that the code of good corporate governance initiated by Securities and Exchange Commission (SEC) be passed into law with appropriate sanctions entrenched.
According to her: “The need to sanitize corporate entities on the virtue of good corporate governance became imperative in the light of recent high profile scandals in our immediate environment. The case in point is the Cadbury Nigeria Plc issue which was extremely embarrassing to us, the regulators, especially given the level of reporting demanded by both the NSE and SEC.”
In this regard, she called on the participants who came from various sectors, to come out with a communique that would contain new ideas and solutions to making corporate governance work in the country.
Continuing, she said: “The NSE is in the process of reviewing its rules and regulations which when concluded, would be circulated to all quoted companies and market operators. Needless to say that in this workshop, efforts have been made to get international perspective on the issue at hand and the question and answer sessions would afford participants an opportunity to air their views.”
While presenting his paper on the corporate governance reforms in the USA and Nigeria and implications for the Nigerian companies at the workshop, Victor Odozi, former Deputy Governor of Central Bank of Nigeria, decried the non-harmonisation of issues affecting the financial industry by regulators of the finance companies.According to him: “The regulators in the finance sector should always agree on what sanction should be imposed on any firm that defaults on the rules of the game after thorough investigation, rather than all doing a different thing.”
He stated that there has been increased focus worldwide on corporate governance in terms of the processes and practices which drive the conduct of business.According to him, “ In specific terms, the main drivers for the increased global focus on corporate governance include: The globalisation of markets, dissatisfaction and frustration with the performance of publicly traded companies some of which had collapsed as a result of financial scandals and the failure of leadership - Enron, Global Crossing, WorldCom, Tyco, Adelphia, etc in 2001/2002."
Other drivers, he stated, are: The rewriting of the rules of the game and the imposition of more stringent responsibilities on directors; The emergence of international best practices promoted by regulators and the need to enhance market and investor confidence and protection through transparency, accountability and discipline.He noted that corporate governance has a critical role to play in the success or failure of companies, stressing that good corporate governance has become a strategic imperative.