The Nigerian Electricity Regulatory Commission (NERC) says
directors cannot serve on more than two companies’ boards in the electricity
industry.
In its ‘Code of Corporate Governance’ report, released on
May 30, the NERC warned against “multiple directorships”.
“An individual shall not concurrently serve as a director of
more than two companies in NESI,” the report reads.
“Simultaneous service on numerous boards may impede an
individual’s capacity to discharge their duties equitably and impartially,
potentially leading to conflicts of interest.
“The board and shareholders must thoroughly assess the
suitability of nominees for appointment, taking into account their other
obligations and commitments.”
According to the report, a prospective nominee to the board
of a licensee must disclose any memberships on other boards before their
appointment.
“The board shall consider the nominee’s other directorships
and ascertain whether the nominee can effectively contribute to the board’s
performance and responsibilities prior to endorsing them for appointment.
Serving directors shall inform the board, through the chairman, of any
potential appointments to other boards,” the NERC said.
The commission mandated individuals who are currently
directors in more than two companies within the sector to “inform the board,
through the chairman, of any potential appointments to other boards”.
The NERC said each director is expected to avoid any
conflict of interest, whether arising directly or indirectly through
affiliations with other entities.
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