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MAY 2023 NEWS ADEOLU IDOWU, OGHOGHO MAKINDE AND GBENGA OYEBODE Corporate Governance and Directors’ Duties in Nigeria: Overview

A Q&A guide to corporate governance law in Nigeria.

The Q&A gives a high-level overview of corporate governance trends; the main forms of corporate entity used; the corporate governance legal framework; corporate social responsibility and reporting; board composition and restrictions; directors’ remuneration; management rules and authority; directors’ duties and liabilities; transactions with directors and conflicts; disclosure of information; shareholders’ rights, company meetings, and minority shareholder action; and internal controls, accounts and audits.

Corporate Governance Trends

What are the main recent corporate governance trends and reform proposals in your jurisdiction?

The Companies and Allied Matters Act 2020 (CAMA 2020) as amended by the Business Facilitation (Miscellaneous Provisions) Act 2022 (Business Facilitation Act) is the most recent legislation on corporate governance in Nigeria. The CAMA 2020 and Business Facilitation Act introduced the following into corporate governance practice in Nigeria:

Single shareholder/single director companies: small companies can now have one shareholder and one director. A small company is one that, among other criteria, has a turnover of up to NGN2 million per annum and a net value of up to NGN1 million. Private companies may have a single shareholder, however, all companies must have at least two directors.

Companies with foreign non-resident shareholders can be private companies with one shareholder.
Electronic meetings and keeping of company records in electronic form.
Board structure and composition: the chairman of the board of directors (BoD) of a public company cannot also be the chief executive officer (CEO) or managing director (MD) of the same company. Public companies are now also required to have a number equal to one-third of the total directors on the board of the company as independent directors. Directors of public companies cannot serve on more than five boards.