OCTOBER, 2003

Code of CorporateGovernance inNigeria

CONTENTS

PREFACE iFORWARD 2THECODEOFBESTPRACTICES 4Part A - The Board of Directors 4Part B-The Shareholders 10Part C - Audit Committee 12Part D -Interpretation 15Part E - Schedules 16Schedule 1 - Specimen Terms of Referencefor an Audit Committee 16Schedule 2- Membership of the Committee 18Schedule 3 - List of Persons and Organisationswho made Written Contributionsto the Final Draft of The Code 20

PREFACE

Long before the highly publicized corporate scandals and failuresworldwide, the global community has shown increasing concern ontheissuesofcorporategovernance.Thereasonforthistrendisnotfar to seek. There is growing consensus that corporate governance,which has been defined as the way and manner in which the affairs of companies are conducted by those charged with the responsibility,hasapositivelinktonationalgrowthanddevelopment.Little wonder therefore that several studies and initiatives have beenundertaken by countries and International Institutions on the subject“Corporate Governance”.As a result of the foregoing, several CodesofCorporatePracticesandConducthavebeenfashionedoutandareinuseinvarious jurisdictions.Realizing the need to align with the International Best Practices, theSecuritiesandExchange Commission (SEC)incollaboration withtheCorporateAffairsCommissioninauguratedaseventeen(17)member Committee on June 15, 2000 in Nigeria. The Committee headed by Atedo Peterside (OON) was mandated to identify weaknesses in thecurrent corporate governance practice in Nigeria and fashion outnecessary changes that will improve our corporate governancepractices.MembershipoftheCommitteewascarefullyselectedtocutacross all sectors of the economy including members of professionalorganizations,organizedprivatesectorandregulatoryagencies.The Committee submitted a draft Code, which was published inseveral newspapers and was further reviewed at three (3) locationsacross the Country, namely: Lagos, Abuja and Port Harcourt. Thisextensive exposure was designed to elicit stakeholders input beforethe Code was finalized. Subsequently, the final report was approvedby the Boards of the Securities and Exchange Commission being theregulatory authority of the Capital Market and the Corporate AffairsCommission being the regulatory authority of Companies in NigeriaastheCodeofBestPracticesforCorporateGovernance.