Sector-Specific Governance: Family Businesses, SMEs, Oil and Gas, Telecommunications and Other Regulated Industries
What the exam tests
This domain tests governance adaptation. The same principles apply, but ownership structure, size and regulator risk change the design.
Core rules
- Family businesses need succession planning, a family constitution or council, clear employment rules and independent oversight. Family membership should not automatically equal executive office.
- SMEs can use lighter governance: a small board, simple delegation, annual accounts and conflict rules. Formal committees may be disproportionate, but fiduciary duties remain.
- Oil and gas entities face the Petroleum Industry Act 2021, with NUPRC and NMDPRA regulation, host-community development trusts, joint-venture governance and transparency expectations.
- Telecommunications operators face NCC licensing and conduct rules, consumer protection, spectrum obligations and data-protection duties under the Nigeria Data Protection Act 2023.
Worked example
A family-owned oil-services company’s founder dies without a succession plan. The board, made up only of family members, appoints the eldest son as CEO. A bank covenant requires an independent director and a succession policy. Reasoning: the appointment may be legal, but it does not satisfy the covenant or good governance. The company should constitute a board with independent representation, adopt a succession policy and separate family council decisions from management decisions.
Traps
Applying one governance template to every sector; ignoring sector regulators; treating family employment as a private matter with no conflict rules; assuming SME audit exemptions remove accounting duties; and ignoring host-community or data-protection obligations.