The media has been urged to effectively utilize the Corporate Governance Rating System (CGRS) in assessing the performance of companies listed on the Nigeria Stock Exchange (NSE) in the country.
The call was made during the Governance, Leadership and Ethics conference organised by The Convention on Business Integrity Limited in Lagos last Friday.
Company Secretary, Unilever Nigeria Plc, Mrs Bidemi Ademola and Company Secretary, GSK Consumer Goods Nigeria Plc, Mr Uchenna Uwecha who made the call were on the panel on Effective Board Leadership: Role of the Corporate Governance Rating System.
The CGRS launched in 2014 by the NSE in partnership with the Convention on Business Integrity (CBi) is designed to rate listed companies based on their corporate governance and anti-corruption culture, with the aim of improving the overall perception of and trust in Nigeria’s capital markets and business practices.
According to Ademola, journalists should avail themselves of the information available on companies and understand what the indicators are.
Uwecha said the media has to tell the truth about the situation of companies to ensure proper regulation of their operations.
“They should dig deeper and have a basic appreciation of financial issues. This is necessary to be able to hold the companies accountable,” Ademola said.
She noted that when companies, for instance, report that debts have been written off, it will be necessary for the media to write about the beneficiaries.
“It is necessary to have a basic understanding of claims made by the companies in their annual reports and provide full disclosure of the faces behind the debts.
“The media has to unearth the things happening in the companies and know what you are interrogating and the indicators.”
Uwecha noted that there is a temptation for the media to take side with the party that pays them more instead of stating the true positions of companies.
“Those doing the wrong things have more resources and that is why the stories of infractions are disappearing from the media. When you search, you don’t find the stories you have seen before
“The media should allow the truth to come out. We need more important stories, not only stories of Boko Haram and other crimes. We also need to focus on things that are really important for the entire county to be properly run.
“We need more report about the maladministration of our country and get those concerned to talk about it,” Uwecha said.
Executive Director of CBi, Mr. Soji Apampa promised to work with media on how to better understand the indicators and utilize the reports of the rating system,
CGRS according to information on www.cbinigeria.com assesses companies on corporate integrity, compliance with NSE and general governance rules (SEC Code, CAMA with industry-specific rules added as relevant), a dimension reflecting certification of directors, and a dimension reflecting the confirmation of expert stakeholders of a company’s integrity.
Its score is a composite of a score for corporate compliance assessment (50%), a Fiduciary Awareness Certification Testing (FACT) of directors (10%) and Corporate Integrity assessments based on feedback from stratified, random sample of stakeholders (20%) and an Expert Multi-Stakeholder Group (EMSG – 20%). The CGRS cover themes including Business Ethics & Anti-corruption, Internal & External Audit and Control, Shareholder & Stakeholder Rights, Board structure and Responsibilities, and Transparency and Disclosure.
“CGRS is at its heart a mechanism for corporate control in that it makes it easier to distinguish poorly governed from well-governed companies on the Nigeria Stock Exchange. The CGRS hopes that the market would reward companies committed to good corporate governance and those with consistently poor behaviour punished in return.
“Companies with already good corporate governance systems in place will be rewarded by receiving incentives for their performance including visibility to investors and lower risk premiums. For companies that want to improve or even embark on the journey towards good corporate governance practice, the CGRS sets clear goals and benchmarks to achieve a higher level of performance in order to ultimately enjoy the same incentives.”
