DETERMINED to set fresh rules and processes for financial institutions other than banks, the Central Bank of Nigeria (CBN) has put in place a distinct Code of Corporate Governance for Other Financial Institutions (OFIs) under its supervision. These institutions include Primary Mortgage Institutions, microfinance banks, mortgage refinance companies, development finance institutions, Bureaux De Change (BDC) and other finance institutions.
In the draft guidelines, the CBN said it had become crucial to institute the code to ensure high ethical conduct and provide minimum acceptable governance standards. Such effective corporate governance practices, the CBN added, will provide an effective and efficient structure that works for the benefit of stakeholders by ensuring that the financial institutions adhere strictly to accepted standards and best practices, as well as the laws guiding their operations.
Although the final guidelines have not been approved, the importance of a code of corporate governance for OFIs cannot be overemphasised. It has our full support. Indeed, the high incidence of misconduct and scandals in the banking and other financial services sector, underscores the need for this code. It will encourage employees and other stakeholders to bring infractions of this code to the attention of the relevant authorities. This will minimise the damage such misconduct could cause different stakeholders and the economy in general.