Telecom sector; the Nigerian Communications Commission, NCC, has made us a new law.
It shall be called the corporate governance code. It shall be, for the telecom industry, a guide to the rules of engagement and other very important practices in the business. However, the law is not binding on anybody; not at the moment, at least!
Of the over N80.3 trillion of the new rebased Gross Domestic Product, GDP data recently declared as the size of Nigeria's economy, the Information and Communications Technology sector, led by the telecom revolution, contributed a whopping N6.97 trillion to earn a star performer status.
This arguably puts the sector as a critical mainstay of the economy. However, evidences abound of sectors twice as big as Nigeria's telecom sector, which collapsed for lack of proper guide.
Apparently avoiding such a misfortune, industry regulator, the Nigerian Communications Commission, NCC, in 2012, took a proactive step to guard the sector, which is estimated at over $25 billion, by inaugurating a corporate governance code working committee to come up with a bible of corporate practices in the sector.
The result of that action, manifested weekend as the committee presented the document to the public in Lagos.
Why the code
Explaining why the commission made the move as he unveiled the code, Executive Vice chairman of the commission, Dr. Eugene Juwah revealed that with hindsight of what has happened in other countries of the world it didn't take rocket science for the commission to anticipate that the over $25 billion industry may experience a downward progression if nothing was done to guard it.
He expressed confidence that the document, if effectively applied, by operators in the sector, could help Nigeria sustain the milestone achievements made so far.
However in a swift moment, Juwah publicly announced that the code was not compulsory for the mean time; meaning that operators and other concerned stakeholders are at liberty to use or dump the document which had cost human, time and financial resources to put together.
Although he also warned that the non compulsory status of the code would be for a while, some industry stakeholders felt that the announcement took away part of the grip the document would have had on industry operators and also denied the people meant to be protected by the law, of expected relief.
A well known industry professional and leader of one of the advocacy groups in the sector who preferred anonymity, told Hi-Tech: "I am disappointed at that declaration.
It has taken the shine off why we are here. I can understand that the commission wants the industry to study and acquaint itself with the content of the document, but the non compulsory declaration is out of place.
This is Nigeria and we know how people behave when you leave things at their discretion.
I think the best would have been to tell everybody that the law is binding but punishment for noncompliance may be delayed for a period of time while everybody is getting adjusted to the new order. But I trust that the EVC would do the needful, he has been great since assuming office" he added.
But, Juwah said the code became necessary to reposition the sector which has undoubtedly contributed more to the country's rebased GDP. He said: "The corporate governance principles of accountability, responsibility, transparency, integrity and ethical conduct, independence among others are important for all types of companies operating in the telecommunications industry whether public or private.
"Shareholders and other stakeholders are now placing higher demand on companies to demonstrate these principles.NCC is determined to promote corporate governance for the telecommunications industry."
For him, "the telecommunications sector is of strategic and high significance to the economy at a macro level and has considerable reach at the micro level.
"The combined factors of the strategic importance of telecommunications and the unprecedented growth of the sector which has seen over 130 million mobile subscribers, with extensive reach across all social and demographic groups in the Nigerian economy makes it imperative that operators in this critical sector to apply and uphold a code of corporate governance, which is specific to their industry."
Chairman of the Corporate Governance Working Group, Dr Fabian Ajogwu, SAN, corroborated Juwah "corporate governance in our emerging economy is driven by the need to develop a system of control which is aimed at increasing shareholder value and surpassing the expectations of other stakeholders. This is more so in recognition of the fact that the corporate governance culture adopted by companies have positive or negative impact on their growth and development. "This code of corporate governance for the telecommunication industry seeks to foster good governance practices in Nigeria telecommunication industry. It hinges on international based practices" he added.
Road to new law
Juwah, however, hinted that the first consultation on the issue of corporate governance code for the industry was in April 2012 with the theme 'Corporate Governance in the Telecommunications Industry--Compliance with Standards, Processes and Procedures' where it highlighted the necessity for a common code by which all telecommunications operators should abide.
However, having discovered the importance of this code and the interest industry professionals showed for it to be introduced, Juwah said the commission in October same year, inaugurated the Corporate Governance Working Group, CGWG, which members were drawn from the operating companies, the commission and decision makers in the corporate world.
Also, in June 2013, the commission said it organised the second stakeholders' consultation on Corporate Governance, with the theme 'Enhancing Stakeholders Responsibility',
Earlier in her goodwill message, Minister of Communications Technology, Dr. Omobola Johnson noted that the main challenge for corporate governance however was to create a system that holds decision makers accountable while according proper respect to their position in the company.
Johnson, who was represented by a director in the ministry, John Ayodele, said the key considerations for a successful corporate governance regime included elements of voluntary commitments and good business practices by the regulated entities.
Johnson advised that "the Code should be backed up with effective monitoring and enforcement processes, while continuously assessing compliance with the basic principles of this Code in line with the best international practices", she stated.
Meanwhile Hi-Tech gathered that the NCC board agreed that the code should be reviewed on a yearly basis to allow for continuous improvements where applicable.