The document outlines the corporate governance framework in Nigeria, detailing the structure, composition, and functions of the board of directors as per the code of corporate governance and the Companies and Allied Matters Act (CAMA). It emphasizes the importance of board size, diversity, independence, and the role of committees, along with guidelines for the selection and remuneration of directors and the responsibilities of the company secretary. Additionally, it mandates a formal training program for directors to ensure they are well-versed in their responsibilities and the company's operations.

1. Corporate Governance
Prof. Adesoji Adesugba, DBA, MBA, M.Sc. LL.B, BL
Faculty at A&E Law Partnership
www.aandelaw.com
The Effective Board: Composition and Structure

2. Board size and balance

3. Board size and balance:
Rule 4 of the Code of Corporate Governance for Public
Companies in Nigeria:
4.1. The Board should be of a sufficient size relative to the
scale and complexity of the company’s operations and be
composed in such a way as to ensure diversity of experience
without compromising independence, compatibility,
integrity and availability of members to attend meetings.
4.2. Membership of the Board should not be less than five
(5).

4. Board size and balance Contd..
4.4. The members of the Board:
I. Individuals with upright personal characteristics, relevant
core competences and entrepreneurial spirit.
II. Record of tangible achievements, knowledgeable in
Board matters.
III. Posses a sense of accountability and integrity and be
committed to the task of good corporate governance.
4.5. The Board should be independent of Management to
enable it carry out its oversight function in an objective
and effective manner.

5. Board Committee

6. Board Committee:
Rule9, Code of Corporate Governance:
9.1 The board should determine:
i. Extent to which its duties and responsibilities should be undertaken
through Committees.
ii. Number and composition of such Committees
iii. Each Committee shall comprise the relevant skills and competences and
its members are able to devote sufficient time to the Committee’s work.
9.2 The board may in addition to the Audit Committee required by the CAMA
establish a Governance/Remuneration Committee and Risk Management
Committee and such other Committees as the Board may deem appropriate
depending on the size, needs or industry requirements of the company.
9.3 It is the responsibility of the Board to facilitate the effective discharge
of the duties and responsibilities of Board Committees.

7. Director Selection and Appointment-
CAMA provides:

8. Director Selection and Appointment-
CAMA provides:
S246. Number of Directors:
(1) Every company registered on or after the commencement of this Act shall have
at least two directors and every company registered before that date shall before
the expiration of six months from the commencement of this Act have at least two
directors.
(2) Any company whose number of directors falls below two, shall within one month
of its so falling appoint new directors and shall not carry on business after the
expiration of one month, unless such new directors are appointed.
(3) A director or member of a company who knows that a company carries on
business after the number of directors has fallen below two for more than 60 days
shall be liable for all liabilities and debts incurred by the company during that
period when the company so carried on business.

9. Director Selection and Appointment-
Contd..
Appointment of first directors:
S 247 the number of directors and the names of the first directors shall be
determined in writing by the subscribers of the memorandum of association or a
majority of them or the directors may be named in the articles.
Subsequent appointments of directors:
S 248.
(1) The members at the annual general meeting shall have power to re‐elect or
reject directors and appoint new ones.
(2) In the event of all the directors and shareholders dying, any of the personal
representatives shall be able to apply to the court for an order to convene a
meeting of all the personal representatives of the shareholders entitled to attend
and vote at a general meeting to appoint new directors to manage the company,
and if they fail to convene a meeting, the creditors, if any, shall be able to do so.

10. d. Directors’ Remuneration

11. d. Directors’ Remuneration
S. 267 CAMA
(1) The remuneration of the directors shall, from time to time, be determined
by the company in general meeting and such remuneration shall be deemed to
accrue from day to day.
(2) The directors may also be paid all travelling, hotel and other expenses
properly incurred by them in attending and returning from meetings of the
directors or any committee of the directors or general meetings of the
company or in connection with the business of the company.
(3) Where remuneration has been fixed by the articles, it shall be alterable
only by a special resolution.

12. Directors’ Remuneration Contd..
(4) A company shall not be bound to pay remuneration to directors, but
where the company agrees to pay, the directors shall be paid such
remuneration out of the fund of the company.
(5) The amount of remuneration shall be a debt from the company so
that if directors take office on the basis of the articles, they shall be
able to sue the company on account of the debt or prove it in the
liquidation.
(6) A director who receives more money than he is entitled to, shall be
guilty of misfeasance and shall be accountable to the company for such
money.
(7) The remunerations of directors shall be apportionable.

13. Directors’ Remuneration Contd..
268. Remuneration of a managing director:
(1) A managing director shall receive such remuneration (whether by
way of salary, commission or participation in profits, or partly in one
way and partly in another) as the directors may determine.
(2) Where a managing director is removed for any reason whatsoever
under section 262 of this Act, he shall have a claim for breach of
contract if there is any or where a contract could be inferred from
the terms of the articles.
(3) Where he performs some services without a contract, he shall be
entitled to payment on a quantum meruit

14. Directors’ Remuneration Contd..
Rule 14 of the Code of Governance provides:
14.1. Companies should develop a comprehensive policy on remuneration
for directors and senior management. Levels of remuneration should be
sufficient to attract, motivate and retain skilled and qualified persons
needed to run the company successfully. The remuneration policy should:-
(a) define the criteria and mechanism for determining levels of
remuneration and the frequency for review of such criteria and
mechanism;
(b) define a process, if necessary with the assistance of external advisers,
for determining executive and non-executive directors’ compensation; and
(c) provide how and to what extent executive directors’ reward should be
linked to corporate and individual performance.
14.2. The Board should approve the remuneration of each executive
director including the CEO individually taking into consideration direct
relevance of skill and experience to the company at that time.

15. Directors’ Remuneration Contd..
14.3.Only non-executive directors should be involved in decisions regarding the
remuneration of executive directors.
14.4. Where share options are adopted as part of executive remuneration or
compensation, the Board should ensure that they not priced at a discount except
with the authorization of the SEC. Any such deferred compensation should not be
exercisable until one year after the expiration of the minimum tenor of
directorship.
14.5. Where share options are granted as part of remuneration to directors, the
limits should be set in any given financial year and subject to the approval of the
shareholders in general meeting.
14.6. Compensation for non-executive directors should be fixed by the Board and
approved by shareholders in general meeting. However, the fees and allowances
or other incentives tied to corporate performance, paid to non-executive
directors, should not be at a level that could compromise their independence.

16. Directors’ Remuneration Contd..
14.7. Companies should disclose in their annual report, details of shares
of the company held by all directors, including on an “if-converted”
basis. This disclosure should include indirect holdings.
14.8. All directors should be required to disclose their shareholding
whether on a proprietary or fiduciary basis in the public company in
which they are proposed to be appointed as directors, prior to their
appointment.
14.9. The Board should undertake a periodic “peer review‟ of its
compensation and remuneration levels to ensure that the company
remains competitive.
14.10. The company’s remuneration policy and all material benefits and
compensation paid to directors should be published in the company’s
annual report.

17. Company Secretary

18. Company Secretary
296 (1) CAMA- A secretary shall be appointed by the directors and,
subject to the provisions of this section, may be removed by them.
298. Duties of a secretary
(1) The duties of a secretary shall include the following‐
(a) attending the meeting of the company, the board of directors and
its committees, rendering all necessary secretarial services in respect of
the meeting and advising on compliance by the meetings with the
applicable rules and regulations;
(b) maintaining the registers and other records required to be
maintained by the company under this Act;
(c) rendering proper returns and giving notification to the Commission
required under this Act; and
(d) carrying out such administrative and other secretarial duties as
directed by the director, or the Company.
(2) The secretary shall not without the authority of the board exercise
any powers vested in the directors.

19. Company Secretary Contd..
Rule 8, Code of Corporate Governance:
8.1. The company secretary should be a person possessing the relevant
qualification and competence necessary to effectively discharge the
duties of his office. Accordingly, the company secretary should be
appointed through a rigorous selection process that is applicable for
appointment of new directors.
8.2. The company secretary has the primary duty of assisting the Board
and management in implementing this code and developing good
corporate governance practices and culture.
8.3. The Company secretary shall report directly to the CEO/MD but shall
also have a direct channel of communication to the Chairman.

20. Company Secretary Contd..
► 8.4. In addition to his statutory functions, the company secretary should carry
out the following duties and responsibilities:
► (a) provide the Board and directors individually, with detailed guidance as to
how their responsibilities should be properly discharged in the best interest of
the company;
► (b) coordinate the orientation and training of new directors;
► (c) assist the Chairman and CEO/MD to determine the annual Board plan and
with the administration of other strategic issues at the Board level;
► (d) compilation of the Board papers and ensuring that the Board’s discussions
and decisions are clearly and properly recorded and communicated to the
relevant persons;
► (e) notify the Board members of matters that warrant their attention; and
► (f) provide a central source of guidance and advice to the Board and the
company, on matters of ethics, conflict of interest and good corporate
governance;
► 8.5. The company secretary should be properly empowered by the board to
effectively discharge his duties and responsibilities. His appointment and
termination should be tabled and ratified by the Board

21. Board Induction and Training

22. Board Induction and Training
Rule 18, Code of Corporate Governance:
Orientation and Training of Directors:
►18.1. The Board should establish a formal orientation programme to familiarize
new directors with the company’s operations, strategic plan, senior management
and its business environment, and to induct them in their fiduciary duties and
responsibilities.
►18.2. It is mandatory for all directors to participate in periodic, relevant,
professional continuing education programmes in order to update their
knowledge and skills and keep them informed of new developments in the
company’s business and operating environment.
►The objective of the training is to assist the directors to fully and effectively
discharge their duties to the company. The training shall be at the company’s
expense.