Issues caveat of reward, sanction
In order to entrench good corporate governance standards and practices in the telecommunications industry, the Nigerian Communications Commission (NCC) has unfolded and ordered a mandatory compliance with the provisions of the Code of Corporate Governance for the Telecommunications sector at stakeholders’ sensitization workshop in Lagos,on Tuesday.
NCC is the government’s regulatory agency for the operators in the telecommunications’ industry. Some of the players in the sector include, MTN, Glo, Airtel and 9Mobile telecommunications’ firms.
The Executive Commissioner, Stakeholders Management, NCC, Mr. Sunday Dare, while speaking with the Daily Times at an aside during the stakeholders’ sensitization workshop, stated that the Code of Corporate Governance has been very timely in the growth and development of the industry, as the Commission followed the part of the regulators across the globe by engaging in the study of the international best practices in the telecom industry.
“We saw that other regulatory regimes from Banking, Security and Exchange Commission and other industries have similar practices; and we felt that having the Code of Governance in telecom industry will do well to promote
accountability, responsibility, equity, fairness and ethical conducts at the level of the operators.
He said that the process began in 2012 and 2016, when it was finally implemented; thereby moving from a regime that was voluntary to a regime that is now mandatory.
“The first phase was a multi stakeholders’ consultation, then had an industry working group which is the normal global practice and eventually we had one codified already and we introduced it to them and we said compliance was voluntary which was put on our website for comments and views, we got feedbacks and then moved it to the mandatory regime,” he highlighted.
Commenting on the issues of reward and sanctions in the Code, Dare said that like the document on hand, there is always a reward and also sanctions because there are responsibilities and duties assigned, adding that, “if you perform very well you will attract investors while the reputation of your company will be enhanced, your returns will also be enhanced and the industry benefits ultimately.
“That reward comes automatically if you behave properly and by the same token if you default there must be a corresponding sanction because it is your responsibility. You heard the stakeholders saying you buy credit pre-paid or post-paid and this money goes to the telcos, they spend the money, and they invest the money.
“These are unsecured creditors, what happens if they go belly up and what happens to their money. In case of the bank you have the NDIC, AMCON through which they can get back their money. But, we just felt that the subscribers, the consumers, Nigerians are important; and are investing so much when you look at the revenue that is coming in.
“The reward itself is not like the NCC will give some money back, but we recognise the rating and we publicize that XY Company has met with the Code. Then, we are encouraging them,” he said.
He cited section 2.1 of the Code of Corporate Governance, noting that compliance with the Code. it is mandatory for all licensees that meet one or more of the following criteria: Spread of operations of the Licenses covers a minimum of 3 geo-political zones; turnover of the licensee is in excess of one billion naira; the number of staff employed is in excess of 200; and where the licensee has a subscriber base of 500,000 or more.
According to him, this section shows that these are the private and slightly big operators that can really be held to account because if any of them with 500,000 subscribers goes down there will be disruptions and that will be massive in the market, hence the threshold.
“Like I said the depositor in the Bank, the NDIC has a back, the CBN has a rack. In the case of telecom subscribers once you scratch a card of N20, 000 and the operator goes down the N20, 000 is gone. There is no where you can go. Now, this Code serves as a deterrent because it places on the Board of these operators that ethics and accountability are followed.”
He said,“Section 11 deals with financial accountability, whistle blowing, and internal audit processes. So, the regulator as it now can go in and look at the books. You have an early warning system and the moment we see that a particular telco is exhibiting signs of financial recklessness or irresponsibility; we can go to the Board to say you got to do something deliberate under the NCC 2003 Acts. We can also call the board to order and we can also withdraw the licence once we see that the value chain is affected or the subscribers are affected. This document is important as it complement some of the provision in the NCC Acts.
“I think we are moving into a regime where we are going to have higher sanity, greater probity, and of course the consumers get greater value and protection from the investors.”
Earlier in his remarks, the Executive Vice Chairman, Prof. Umar Danbatta said that this renewed approach is aimed at driving down overall management risks and vulnerabilities. He said that he hoped that the revised Code of Corporate Governance would not only assist in enhancing business prosperity and corporate accountability, but help in consolidating on the gains of the telecoms sector to the nation’s economy and attract stronger stakeholders’ support.