Nigerian Electricity Regulatory Commission (NERC) has introduced a new code of corporate governance for the electricity industry, limiting directors to serving on no more than two companies’ boards within the sector.
Gatekeepers News reports that according to the commission’s report released on May 30, “An individual shall not concurrently serve as a director of more than two companies in NESI.”
The NERC warned that simultaneous service on numerous boards may impede an individual’s capacity to discharge their duties equitably and impartially, potentially leading to conflicts of interest.
“The board and shareholders must thoroughly assess the suitability of nominees for appointment, taking into account their other obligations and commitments,” the report reads.
Prospective nominees to the board of a licensee are required to disclose any memberships on other boards before their appointment.
“The board shall consider the nominee’s other directorships and ascertain whether the nominee can effectively contribute to the board’s performance and responsibilities prior to endorsing them for appointment,” the NERC said.
Individuals who are currently directors in more than two companies within the sector are required to inform the board, through the chairman, of any potential appointments to other boards.
Each director is expected to avoid any conflict of interest, whether arising directly or indirectly through affiliations with other entities.
