The Nigerian Code of Corporate Governance 2018: An Ethical Approach to the Nigerian Corporate Governance System?

Olayimika Phillips, Partner, Olaniwun Ajayi LP, Nigeria

The utility of good corporate governance practices cannot be overemphasised in any organisation, as sound processes evincing the principles of transparency, fairness and accountability have become imperative for national and global economies. Indeed, the benefits of adopting strong corporate governance ethics in a developing economy remain alluring today. In ensuring sound corporate governance practices in Nigeria, the Financial Reporting Council of Nigeria (FRCN) released the Draft Nigerian Code of Corporate Governance 2018 (the Draft Code), which seeks to, inter alia, institutionalise the highest standards of corporate governance best practices in Nigerian companies, and promote public awareness of essential corporate values and ethical practices that will enhance the integrity of the Nigerian corporate landscape. Perhaps the most impactful innovation of the Draft Code is its philosophy which takes the ’Apply and Explain” approach of implementation. In precis, this approach requires companies to take responsibility for demonstrating how the specific activities they have undertaken best achieve the intended outcomes of corporate governance specifications in the Draft Code as opposed to the mandatory compliance approach adopted by the Nigerian Code of Corporate Governance 2016. This paper therefore examines the Draft Code’s philosophy and how it attempts to alter the corporate governance regime in Nigeria. The Nigerian corporate governance system, as we know it, focuses primarily on legal processes and structures to ensure compliance, whilst the ethical basis is seen to be absent. The difficulty with legal structures and its compliance mechanisms is that most corporate practices that have enraged the public are entirely legal. This paper seeks to explore the role of the Draft Code in shifting the focus from a structural perspective to an ethical perspective, and the viability of the Draft Code in sustaining the ethical values of transparency, fairness and accountability.

Olayimika Phillips has over 34 years of professional experience and specializes in corporate and regulatory matters across numerous sectors including advertising, ecommerce, technology, and telecommunications. She is the Partner in charge of the Enterprise and Corporate Governance Practice Groups where she routinely advises both local and international clients on corporate and general corporate governance matters. Olayimika serves on the Board of several companies including eTranzact International Plc, Phillips Consulting Limited, Abugansoro Investment Company Limited, Aviat Networks Communications Solutions Limited, GilatSatcom Nigeria Limited and Olaniwun and Adunola Ajayi Foundation. She is also a shareholder in numerous quoted companies, and also regularly invests in start-ups where she provides leadership and corporate governance support. Olayimika obtained her first degree in Botany and her second degree in Pharmacy from the University of Ife before proceeding to the University of Lagos to study law. She also holds an MBA from the prestigious Durham University. Olayimika joined the firm of Olaniwun Ajayi LP (the Firm), a leading law firm in Nigeria in 1992 where she served as its Practice Manager. In 2002, she was called to the Nigerian Bar and was later admitted to the Partnership Board of the Firm in 2003.

Olaniwun Ajayi LP (OALP), established in 1962, is one of the oldest law firms in Nigeria, and for more than half a century, OALP has been at the forefront of commercial practice in Nigeria, thereby earning the reputation of being one of the leading law firms in Nigeria. OALP has consistently been ranked Tier 1 by all the leading international directories, including Chambers Global, IFLR 1000 and Legal 500. With almost eighty (80) lawyers and full service commercial law capabilities (balanced between intricate high-value litigation and complex big ticket transactions), we are active in all the major sectors of the Nigerian economy helping corporates, non-governmental organisations, government agencies, organisations and individuals achieve their goals. With the experience gathered over the years in advising businesses, foreign investors, financial institutions, governments and public sector bodies, the demands of major projects and clients’ needs are quickly appreciated. This puts OALP in an unrivalled position to proffer value-driven strategies and commercially relevant advice of the highest quality, not only in the law but also on ’best practices”, thus weaving commercial, technical, tax, legal and practical realities in a seamless whole.