Professional Assessment of Corporate Governance Compliance Obligations Under the Nigerian Code of Corporate Governance 2018

The Nigerian Code of Corporate Governance 2018, issued by the Financial Reporting Council of Nigeria, introduced a comply-or-explain governance framework applicable to all public companies, regulated entities, and non-governmental organisations, yet its practical implementation has been uneven across sectors. This study provides a professional assessment of corporate governance compliance obligations under the Code, examining board composition requirements, audit committee standards, disclosure obligations, and related-party transaction controls. A professional audit methodology was applied to a sample of 25 publicly quoted companies across banking, manufacturing, and consumer goods sectors, drawing on published annual reports from 2020 to 2023 supplemented by interviews with 15 company secretaries and governance professionals in Lagos and Abuja. Results indicate that board independence requirements are formally satisfied in most sampled companies, though substance over form analysis reveals that some nominally independent directors have material business relationships with management. Audit committee financial expertise requirements are inadequately met in 36 percent of sampled companies. Related-party transaction disclosure standards were the most consistently non-compliant dimension. The study concludes that the comply-or-explain model is insufficient without regulatory capacity to assess the quality of explanations provided for non-compliance. Recommendations include an FRC annual corporate governance review programme, mandatory director independence re-examination every three years, and a detailed related-party transaction register requirement for all regulated entities with annual submission to the FRC.

Keywords: corporate governance, FRC Nigeria, board independence, comply-or-explain, related-party transactions