Corporate Governance, Financial Reporting and Disclosure
This domain tests how public companies and operators are governed and what they must tell the market.
Governance framework
The SEC Code of Corporate Governance for Public Companies sets principles on board composition, independence, separation of chair and CEO, audit committees, risk management, whistleblowing and related-party transactions. The FRC's Nigerian Code of Corporate Governance applies on an apply-and-explain basis. CAMA 2020 supplies the statutory machinery: directors' duties, audit committee composition, meetings and shareholder rights.
Key governance expectations
- A board with sufficient independent and non-executive directors, and a majority independent where required.
- An audit committee including shareholder representatives, overseeing external audit and internal controls.
- Related-party transactions identified, approved at the right level and disclosed; no self-dealing.
- A whistleblowing policy with protection for whistleblowers.
- Board and director evaluation, and succession planning.
Financial reporting and disclosure
IFRS-based financial statements filed with SEC and the exchange within regulatory deadlines; quarterly and annual reporting; immediate disclosure of material information; restrictions on insider dealing before publication; corporate actions notified with the required timetables.
Worked example
A managing director tells a friendly analyst the unreleased Q3 profit before the board approves it, and the analyst buys shares. Reasoning: this is inside information; the MD has tipped and the analyst has dealt while in possession, both offences under ISA 2025, and the company has failed its disclosure obligation. The correct path is announcement through the exchange first, then discussion.
Traps
Treating the FRC code as the only governance standard; assuming a private company with public shareholders has no disclosure duties; ignoring the blackout period around results; approving a related-party deal at management level.