National Coordinator, Independent Shareholders Association, ISAN, Mr. Adeniyi Adebisi, in this interview with Financial Vanguard spoke on audit committee membership and the provision of CAMA as well as government policy that affects the petroleum marketing companies quoted on the Nigerian Stock Exchange, NSE. Excerpts
W HAT is your view about shareholders occupying audit committee positions in quoted companies without having accounting knowledge? Adeniyi Adebisi I do not see anything wrong for shareholders to occupy audit position in quoted companies provided they have some ideas to contribute. The law that regulates these companies allows three members of shareholders of a company to occupy the audit position, while three members from the management to be in the audit committee. The law did not say that shareholders should be accountants to be in audit committee. That was our major concern as leading shareholders’ group, Independent Shareholders Association of Nigeria, ISAN, to challenge the then leadership of Financial Reporting Council, FRC in court who want to impose their own rule.
What does the law state that justify shareholders to be members of the audit committee?
Companies and Allied Matters Act, CAMA 1990, from which public companies operate, as indicated from Section 359 (3 & 4), that relates to qualification and experience of audit committee members, including the chairman provides that: “The chairman of the audit committee should be a non-executive director, to be nominated by members of the audit committee. Basically, members of the committee should be able to read and understand basic financial statements, and should be capable of making valuable contributions to the committee.” So for the FRC to enforce their rule, then CAMA must be reviewed.
In your own view, has shareholders in the audit committee of these quoted companies been performing well to your expectation?
To some extent, they have been doing well in terms of representing us as shareholders and that depend on the openness of the companies involved. Some companies are not open enough while others are very transparent. For instance, you can see that Total Nigeria Plc has been transparent to tell us the challenges it is facing in the hands of government as regulator in the Oil and Gas sector.
The Chairman of Total Nigeria told us the shareholders at its last Annual General Meeting, AGM what their challenges are. The chairman did not hide anything from the shareholders and we all were happy. But […]
