The Institute of Chartered Secretaries and Administrators of Nigeria has asked the Securities and Exchange Commission and the Nigerian Stock Exchange to map out measures that will ensure best practices by listed companies.
The ICSAN stated this at its 2017 annual conference in Lagos, saying, “Institutional shareholders should find time to understand regulations, as set out by the SEC and NSE, while serving as corporate governance watchdogs over the companies they invested in.”
It also called for effective shareholders’ engagement to enhance the credibility of organisations, noting that such would facilitate a better understanding between the stakeholders and board of directors of companies.
The National Coordinator, Independent Shareholders Association of Nigeria, Mr. Adeniyi Adebisi, said it was the duty of all stakeholders to be involved in decision making considering that the rule of law, accountability and transparency were the guiding principles, which should be adopted by all.
“If this is done, it will be difficult to serve any other interest outside the interest of the company and the interest of the shareholders. There is really no difference between an institutional shareholder and other class of shareholders whether big, small, or retail. The expectation is the same – to receive good return on investment,” he said.
According to him, dilemma arises when the directors have to take a decision on critical issues bordering on the interest of the company as an entity, the interest of shareholders and the personal or selfish interest of the directors.
The Head, Investment Research and Corporate Strategy, Stanbic IBTC Pension Managers Limited, Mr. Charles Omoera, said that increased engagement with shareholders over the last few years with regular yearly AGMs and quarterly analyst calls were not enough.
Omoera, who was the co-speaker at the conference, highlighted some of the benefits of having effective shareholders’ engagement, which, he said, “include companies divesting under-performing businesses and changing board or company strategies.”
Other conclusions reached at the conference included a review of the voting process at annual general meetings; and that institutional shareholders from certain sectors (insurance industry, pension industry, foreign investors, accounting bodies, etc) should be given specific slots at AGMs to ask questions and make comments; among others.
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