Governance and Ethics: Board Accountability and Professional Conduct
Governance and Ethics examines board effectiveness, accountability, stakeholder protection and professional conduct under the Nigerian Code of Corporate Governance 2018, CAMA 2020 and the IESBA Code.
Core rules
- The board provides entrepreneurial leadership within a framework of prudent controls; it sets strategy, oversees management and reports to shareholders.
- Separate the roles of chair and CEO; include independent non-executive directors; use audit, risk, remuneration and governance committees.
- Directors owe duties of good faith, care and skill, and must avoid conflicts under CAMA 2020.
- Governance codes generally operate on a comply-or-explain basis; regulators may mandate specific provisions.
- IESBA fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, professional behaviour.
- Threats: self-interest, self-review, advocacy, familiarity, intimidation. Apply safeguards or decline the engagement.
Worked example
An audit partner is offered shares in a longstanding client at a discount. This creates a self-interest threat and may impair independence. The partner should decline the shares, disclose the offer to the firm's ethics partner, and remove herself from the engagement if the threat remains significant. Long association also creates familiarity; rotate the engagement partner or apply an independent quality review. Legal ownership alone does not make the conduct ethical.
Traps
Treating compliance with law as proof of ethical behaviour; breaching confidentiality without a legal or professional duty; confusing familiarity with objectivity; accepting a safeguard that is not effective; and ignoring governance weakness because the company is profitable.