SEC tasks shareholders on future of companies

By Aminu Imam & Ngozi Onyeakusi, Abuja

Shareholders have been urged to show more interest in the affairs of their  companies  rather than being concerned on returns on investment made into the organization.

Shareholders, who are the real owners of companies were expected to  take active part in decisions of affairs of their companies  in order to safeguard the future of their companies.

“Shareholders should pay more attention to monitoring how their companies are managed . The shareholders’ association should be more responsive to ensuring accountability and effective management of their company”, said the Director and Secretary to the Securities and Exchange Commission, Mr Edosa Aigbekan  while presenting a paper titled, The Corporate Governance Framework in Nigeria  at the 2014 Journalist Academy organized by the Securities and Exchange Commission (SEC) in Abuja.

He noted that there was every tendency for companies with dominant passive shareholders to be ineffective and badly managed by board of directors.

According him, corporate governance, a set of relations between a company’s management, board, shareholders and other stakeholders that provides structure through which the objectives of the company were set and means of attaining those objectives must be strictly adhered to save organizations from collapse.

He noted that since there was  no law in place to determine Directors and management’s  remuneration, shareholders are permitted to set up independent remuneration committee to determine through voting amount paid as remuneration to directors and top management of companies.

He noted that enforcement of corporate varies from country to country adding that Nigeria’s code of corporate government for capital market is regulator’s driven.

“Corporate framework differs from country to country. The United States of America’s approach to corporate governance can be characterised as a regulator-led system predominalty enforced through SEC regulations, stock Exchange listing rules and state laws. The  Us does not have a code of corporate governance similar to that of  Nigeria or United kingdom, given the federal nature of its constitution”.

“In Nigeria, the framework for corporate governance is the regulator-led approach. The SEC had, in the early 200s realised that good corporate governance can reduce the risk of financial crisis which can have devastating economic and social cost and that good corporate governance helps to underpin market confidence and financial stability” , he said.