The Nigerian business landscape is a dynamic force, constantly adapting to new regulations and evolving best practices. In 2023, several key developments in governance set the stage for significant trends that will shape the corporate landscape in 2024 and beyond, some of which include:

1. Shifting tides: Resignations and appointments

In a major shift, the Central Bank of Nigeria (“CBN”) imposed a 12-year term limit for executive directors of banks in Nigeria through the Corporate Governance Guidelines, that came into effect August 1, 2023. This has triggered a wave of anticipated resignations and appointments. Banking institutions will need to replace directors exceeding their terms, injecting fresh perspectives and expertise into their boards. Similarly, the National Insurance Commission's revised tenure limits for insurance executives, effective January 1, 2023, will likely lead to a cascade of board changes across the sector.

2. A Fresh chapter: New codes of governance

The Financial Reporting Council of Nigeria (FRCN) is actively developing corporate governance frameworks for the public and not-for-profit sectors. The anticipated adoption of these codes signifies a commitment to enhancing transparency, accountability, and ethical practices within these crucial sectors. Additionally, the introduction of the Small and Medium Enterprises Corporate Governance Guidelines this year 2024 will equip smaller businesses with the tools and guidance they need to build sustainable and responsible operations.

3. Dissolution of boards and consequences: Holding companies accountable

The recent dissolution of the boards of Union Bank, Polaris Bank, and Keystone Bank by the CBN serves as a stark reminder of the consequences of regulatory non-compliance for Nigerian businesses. This bold move sets a precedent for stricter enforcement, for companies operating in sectors regulated by the Securities and Exchange Commission, the National Pension Commission (PENCOM), and the National Insurance Commission (NAICOM), potentially leading to further dissolutions in the face of corporate governance failures.

Looking ahead: Trends on the horizon

These developments point towards several key trends which will shape the Nigerian business landscape in 2024:

• Emphasis on Board Composition: Fresh perspectives and diverse skillsets will be increasingly sought after in board appointments, leading to more dynamic and effective governance structures.
• Enhanced Transparency and Accountability: The adoption of new governance codes across various sectors will promote responsible business practices and strengthen stakeholder trust.
• Sustainable Growth: Smaller businesses will be empowered to implement effective governance practices, fostering long-term stability and success.
• Zero Tolerance for Non-Compliance – Regulatory bodies will take a stricter stance on governance failures, potentially leading to more board dissolutions amongst other sanctions.

Navigating the evolving corporate governance landscape will require Nigerian businesses to remain agile and adaptable. By embracing good governance practices, companies can position themselves for sustainable growth and contribute to a more vibrant and ethical business environment in the years to come.

At Adcax Nominees Limited, we pride ourselves in supporting our clients' business in navigating the intricate landscape of corporate governance. From navigating regulations to establishing sound structures ensuring seamless compliance, our expert team is here to guide you every step of the way. Let's ensure your business operates with transparency, accountability, and long-term success in mind. Reach out to us today via email at adcaxnominees.nigeria@dentons.com to learn how we can assist with your corporate governance compliance issues.