NCC to enforce compliance with Corporate Governance Code

The regulatory authority of telecommunication sector, Nigerian Communications Commission (NCC) has given a final signal that the honey moon is over the two years of voluntary compliance as it will now bark and bite if any telecommunications company operating in the country fails to embrace the Corporate Governance Code for the industry.

The mandatory enforcement of Corporate Governance Code for the industry is coming on the heels of the recent stakeholders’ forum held to fine-tune the document by the commission in Lagos.

Prof Garba Danbatta, executive vice chairman/CEO, NCC, at a “Corporate governance forum: Review of the industry code” in Lagos, said the Code was largely declaratory in nature and implementation was initially voluntary across the industry thus leading to violations.

Danbatta warned that enforcement of regulatory stipulation is a last resort, adding that once “you are operating in a market, the rule of engagement must be respected”.

According to him, the liberalisation of the telecoms industry opened investment opportunities for both local and foreign companies, contributing significantly to the country’s Gross Domestic Product (GDP).

He emphasizes that it was in recognition of the need to sustain the phenomenal success recorded in the industry and replicate the lessons learnt in other sectors that had gone through the “Boom and Bust” cycle, the Commission in 2012 set up a multi-stakeholder Corporate Governance Working Group (CGWG) with membership drawn from across the Nigerian telecoms industry, the Commission and Corporate Governance practitioners.

The mandate of the Group, he added, was to determine the industry’s corporate governance needs and the best approach to be adopted in addressing them, and noted that the CGWG developed the Code of Corporate Governance for the telecoms industry, which was published in 2014.

Some telecom companies, Daily Times gathered have over the years regularly and consciously ignored sustained and systematic red flags as their promoters and managers diverted funds meant for expansion into frivolous projects like manufacturing, oil and gas, politics and so on.

Daily Times also learnt that the practice quickened the deaths of most CDMAs in the country because of the fraudulent and self-serving practices of some members of board and management and the overbearing influence of chairmen or Managing Directors /CEOs of CDMAs.

Some experts also buttressed that non-compliance with laid down internal controls and operation procedures, biased recruitment exercises and general lack luster management practices as some of the reasons why many other telecom companies have folded up.