Kayode Tokede
NGX Regulation Limited (NGX RegCo) and the Institute of Chartered Accountants of Nigeria (ICAN) have equipped audit committee members of listed companies on enhancing of their corporate governance best practices.
At the workshop held at the Exchange in Lagos recently, investors and other stakeholders gathered to learn more about the role of the audit committee, expectations from a regulatory standpoint and more.
In her opening remarks, Tinuade Awe, Chief Executive Officer, NGX RegCo ably represented by Head, Broker Dealers Regulation, Olufemi Shobanjo NGX RegCo, said “This training is in line with NGX RegCo’s quest to uphold the integrity, transparency, and efficiency of the Nigerian capital market. Engagement between NGX RegCo and Issuers is a fundamental component in achieving the overarching goals of a well-functioning capital market.
“NGX RegCo and ICAN organized this program to train shareholder representatives of Audit Committee Members of Listed Companies on their expected roles in ensuring that corporate governance best practices are enshrined in their companies.”
Shobanjo stated further, “Today’s training is geared towards equipping Audit Committee members with the requisite knowledge to make positive contributions at Committee Meetings and to enhance their regulatory duties as Audit Committee members of Listed Companies”.
Speaking at the event, the Coordinating Director, Inspection & Monitoring and Corporate Governance Directorates of the Financial Reporting Council (FRC), Nigeria, Mr. Titus Osawe, FCA, pointed out that board committees play a crucial role in the corporate governance structure of a company.
He said, “Directors play a crucial role in strengthening corporate governance practices within an organization as they are poised to ensure that the appropriate system of rules, practices, and processes are in place in the entity they serve as Board members. Their role in fostering a culture of good corporate governance is pivotal in companies and Board committees are one avenue through which this is seamlessly achieved.
“The Committee responsible for Audit (Audit Committee and in some instances, Audit and Risk Management committee), provides ready support to the Board in fulfilling its governance and oversight responsibilities as it relates to financial reporting, internal controls, risk management, internal and external audit functions and ethical accountability. This lays credence to the importance of Audit Committee.”
According to Osawe, the NCCG 2018 highlighted two types of Audit Committees; Statutory Audit Committee and Board Audit Committee.
While Section 404(2) of CAMA 2020 and Principle 11.4.6 NCCG 2018 mandate the establishment of SAC by Public Company, Section 404(3) – CAMA 2020 prescribed membership of SAC as five (3-shareholders and 2-Non-Executive Directors), with at least, 1 member, a professional accountant.
The head of Listings Regulations, NGX RegCo, Godstime Iwenekhai, in his presentation, highlighted the need for audit committee members to understand the business of the company to fully function in their roles.
He said, “Understand the nature of the business. Identify and understand the regulatory landscape of the business and global trends and best practices within that sector/business.”
In addition, Iwenekhai recommended some of the ways to enhance the performance of audit committees, which include training on new reporting standards e.g new IFRS and sustainability standards; personal development as well as effectively communicating with the Board and making recommendations: and engagement with the auditor to address issues or discrepancies raised.
In recent times, NGX RegCo has embarked on a series of workshops to improve the capacity of stakeholders in the capital market.