ANALYSIS OF THE COMPOSITION OF BOARD OF DIRECTORS IN THE NIGERIAN CODE OF CORPORATE GOVERNANCE 2018

Abstract

The composition of board of directors is an important factor in the determination of an effective board that would run the company properly to achieve its strategic objectives based on business best practices. The board being the hallmark of corporate governance has been given priority attention and consideration in the Nigerian Code of Corporate Governance 2018 issued by the Financial Reporting Council of Nigeria by its authority in section 11 (c) of the Financial Reporting Council of Nigeria Act, 2011. The Code seeks to institutionalize the highest standard of corporate governance best practices in Nigerian companies. It is against this backdrop that this article was poised to examine the code’s provisions to determine whether its provisions on board structure and composition has pragmatically suggested highest standard of corporate governance best practices. The article adopted the doctrinal method of research by evaluating the code and other relevant literature upon which opinions were formed and conclusions drawn. The research found that the presence of independent non-executive directors in the board is not conclusive evidence that the board shall entrench corporate governance. In addition, the code has omitted to prescribe special qualification for board chairman. It was therefore, recommended that the appointment of independent non-executive directors should be based on proven integrity which could suggest their objectivity. The code should be reviewed to include provision that will prescribe the qualification and quality of the board chairman who will be able to provide credible leadership.