Corporate Governance in the Private Sector: Companies, Listed Entities and Financial Services
What the exam tests
This domain tests the governance chain from private companies to listed entities and regulated financial institutions. It covers directors’ duties, shareholder organs, market disclosure and prudential regulation.
Core rules
- CAMA 2020 codifies directors’ duties: act in good faith, in the company’s best interests, with care and skill, and avoid conflicts. Directors owe duties to the company, not to a controlling shareholder alone.
- Listed companies face NGX listing rules and SEC rules on disclosure, related-party transactions, free float and shareholder meetings.
- Banks, insurers and pension operators face sector codes and “fit and proper” tests. A listed bank must satisfy company law, market rules and CBN requirements at once.
- Related-party transactions need disinterested approval, arm’s-length terms and disclosure.
Worked example
A listed bank proposes a ₦500 million loan to a company owned by one of its directors. The board cannot simply approve it in the director’s presence. Reasoning: the director has a conflict; disinterested directors must consider CAMA related-party rules, CBN exposure limits and NGX disclosure. The transaction may also require shareholder approval depending on size and rules. Approval without conflict management is a governance breach even if the loan is commercially sound.
Traps
Assuming a private company has no fiduciary duties; treating SEC or NGX rules as optional for listed entities; ignoring sector-regulator approval; allowing an interested director to vote; and disclosing a related-party deal only after year-end.