1.
Code of Corporate Governance for Public Companies
This is only applicable to
listed public companies.
(i) Membership of the Board should not be less than 5.
(ii) Majority of the Board should be non-executive
directors, at least one of whom should be an independent director.
(iii) The Chairman of the Board should be a non-executive
director.
(iv) The Board should be independent of Management to
enable it carry out its oversight function in an objective and effective manner.
(v) Not more than two members of the same family should
sit on the board. It is interesting to note that there is no such provision in
the CAMA.
(vi) Company secretary should be selected through a
rigorous selection process.
(vii) The board in addition to the Audit Committee is required
by CAMA to establish a Governance/Remuneration Committee and Risk Management
Committee and such other committees as the Board may deem appropriate depending
on the size, needs or industry requirements of the company.
(viii) To effectively perform an oversight function and
monitor management’s performance, the Board should meet at least every quarter.
(ix) Every director should be required to attend at least
two-thirds of all Board meetings.
2.
Companies and Allied Matters Act and the Code of
Corporate Governance for Public Companies 2011
(a)
The Code of Corporate Governance for Public
Companies 2011 states that the board of directors should not be less than 5;
but the CAMA states that board of directors should not be less than 2.
(b)
The Code of Corporate Governance for Public
Companies 2011 says that a company cannot be a listed as a public company
on the stock exchange if it has less than 5 directors. This is not provided for
in the CAMA.
(c)
There is no
classification as to different types of directors in CAMA but this is done in
the Code. The Code also states the differences and relationship between the
different types of directors.
(d)
Section 259 of the CAMA provides that at the
first Annual General Meeting, all directors shall retire and this is in line
with the 2011 Code of Corporate
Governance for Public Companies.
(e)
In relation to qualification
of executive directors, the Code of
Corporate Governance for Public Companies 2011 mandates that he must have
the necessary qualifications.
(f)
In relation to duty
of care and skill in CAMA, the Code of
Corporate Governance for Public Companies 2011 just gives details on what
amounts to care and skill and by so doing reinforces CAMA.
(g)
The CAMA is silent on
the issue on whether you can merge the position of Chairman and Chief Executive
Officer; but the Code of Corporate
Governance for Public Companies 2011 is clear that these posts must be occupied
by separate people.
(h) The
Code of Corporate Governance for Public
Companies 2011 mandates that directors should not be members of Board of
companies in the same industry; but this is not expressly stated in the CAMA.