The Nigerian telecoms industry is worth over $25bn based on recent evaluation. This huge investment can be safeguarded if operators and the regulator uphold good corporate governance among other virtue, writes OZIOMA UBABUKOH The recent unveiling of telecoms corporate governance code for telecoms industry by the Nigeria Communications Commission is expected to provide another mechanism for ensuring protection of the over $25bn investment in the sector. But stakeholders still want to know whether there could be other benefits. However, it is expected that if well managed across board, the ripple effects will lead to creation of more jobs, among other benefits. Despite myriads of challenges in the sector, the Federal Government has continuously put in place initiatives aimed at engendering increased competitiveness and enthroning global best practices. All these are also geared towards ensuring adequate protection for telecoms investment, all with a view to creating an enabling environment for increased growth of the sector and its subsequent impact on the overall economic development of the country. The Nigeria’s telecoms sector, indeed, has witnessed astronomical growth in telephony access and data penetration. Today, active telephone lines are well over 130 million with about 56 million Nigerians having access to the Internet. The impact of telecoms sector in other sectors such as banking, e-commerce, agriculture, education, oil and gas and so on, and the volume of jobs the sector is creating, has been described as unprecedented. Today, the sector contributes close to nine per cent to the nation’s overall Gross Domestic Product. According to Pyramid Research reports, Nigeria is currently an investment destination for telecoms business. The report stated, “The presence of an enabling operating environment being engendered by the Nigerian Communications Commission through an enabling law – the Nigerian Communication Act 2003 – is a key success factor for the largest telecoms market in West Africa.” It is instructive, therefore, that the regulator’s continuous effort to put the industry on the upward swing informed the unveiling of corporate governance code for the telecoms players in Lagos recently. With the unveiling of the industry-specific code of corporate governance, the NCC has said it intends to enthrone global best practices among the boards of telecoms players, whose actions and inactions have far-reaching effects on the entire telecoms industry. “The code became necessary to reposition the sector to contribute more to the country’s rebased GDP,” the Executive Vice Chairman of NCC, Dr. Eugene Juwah, said at the unveiling of the code in Lagos. Juwah said the corporate governance principles of accountability, responsibility, transparency, integrity and ethical conduct, independence, among others, were important for all types of companies operating in the telecommunications industry whether public or private, large or small. “The requirement for good corporate governance does not wane on account of size or type of business affiliations,” Juwah said, adding that, “Shareholders and other stakeholders are now placing higher demand on companies to demonstrate these principles. Thus, NCC is determined to promote corporate governance for the telecommunications industry.” Going on a memory lane on the genesis of the code, the NCC boss explained that in June 2013, the commission organised the second stakeholders consultation on Corporate Governance, with the theme ‘Enhancing Stakeholders Responsibility’. He said, “The first consultation was in April 2012 with the theme ‘Corporate Governance in the Telecommunications Industry: Compliance with Standards, Processes and Procedures,’ where it was highlighted that the absence of a common code to which all telecommunications operators should abide.” Juwah said to address the gap, NCC inaugurated the Corporate Governance Working Group in October 2012, whose members were drawn from the operating companies, the commission and corporate governors. “The telecommunications sector is of strategic and high impact significance to the economy at a macro level and has considerable reach at the micro level,” he said. According to him, “This is made up of a wide range of operators with diversity in size, scope of operations, asymmetry qualifications, legal and regulatory requirements, capital market activities as well as local and cross-border relationships.” Juwah also maintained that the combined factors of the strategic importance of telecommunications and the unprecedented growth of the sector (over 130 million mobile subscribers) with extensive reach across all social and demographic groups in the Nigerian economy made it imperative that operator in this critical sector to uphold a code of corporate governance, which is specific to their industry. The Minister of Communications Technology, Dr. Omobola Johnson, who was represented by a Director, Postal and Telecoms Services in the ministry, Mr. John Ayodele, noted that the main challenge for corporate governance, however, is to create a system that holds decision makers accountable while according proper respect to their position in the company. Johnson said the key considerations for a successful corporate governance regime typically would consist in elements of voluntary commitments and good business practices by the regulated entities. “The code should be backed up through effective monitoring and enforcement processes, and continuously assessing compliance with the basic principles of this code in line with the best international practices”, she stated. The Chairman of the CGWG, Dr. Fabian Ajogwu, said the code became necessary to consolidate on the gains of the telecoms sector. Ajogwu said the code help resolve challenges of weak internal controls in organisations; help passive shareholders; avoid conflict of interest; enable effective management information system, among others. NCC’s Executive Commissioner, Stakeholder Management, Okechukwu Itanyi, also said the commission is looking at every means to improve on the growth of the sector. Itanyi said the code might become mandatory after two years depending on the industry situation. The Code of Corporate Governance for the Telecommunications Industry aims to promote good corporate governance practices in the industry and would create a credible industry, which every stakeholder can have confidence in as well as foster the growth and development of the industry and larger national economy. According to experts, enthronement of good corporate governance standards and practices in organisations encourages corporate success and business sustainability. This code adopts the principles, standards and laws laid down in existing statutes in Nigeria, particularly by the Companies and Allied Matters Act, the Nigerian Communications Act, among others. The code, which is subject to the provisions of CAMA as it relates to directors’ and officers’ responsibilities in the company, directly put the responsibility for the implementation of the new code on the boards of directors of telecoms companies. The code, for instance, reads in part, “The board should take responsibility for the implementation of this code and ensure the adoption of its provisions across the company. The board should ensure that a Code of Conduct with provisions which align with this new code as a minimum standard of ethics is developed within the company.” No doubt, the sudden disappearance of some players in the telecoms industry has been partly linked to poor observance of corporate governance. With the code in place, the next big task, as has been observed by the stakeholders, was for the NCC to put in place necessary monitoring mechanism to ensure that operators’ activities align with the code. Copyright PUNCH. All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH. Contact: editor@punchng posted on July 28, 2014 at 12:00AM Send an email to Joseph T. Obagbemisoye 08140584469 or 08086797418 Like JTNNG on facebook facebook/jtnng91 View Joseph T. Obagbemisoyes profile on facebook facebook/jtob91 Follow @jtob91 and get followed also jtnng.blogspot/
Posted on: Sun, 27 Jul 2014 23:26:16 +0000
Trending Topics
Recently Viewed Topics
© 2015