Red Star Plc, has emerged the first in the logistics industry to get the Corporate Governance Rating as awarded by the Nigerian Stock Exchange(NSE) and the Convention on Business Integrity (CBi). The duo of NSE and CBi awarded this rating to about thirty-three (33) companies and Four Hundred and Thirty-Five (435) Directors under the Corporate Governance Rating System (CGRS) initiative.
The Purpose of the CGRS rating is to improve the level of corporate governance of listed companies which is a developmental index that will help to boost the company’s image and better cooperation when it needs to transact with foreign partners.
During a media briefing recently in Lagos, the Chairman, Steering Board of the Corporate Governance Rating System (CGRS), Ms Tinuade Awe, who doubles as the Executive Director, Regulation at the NSE, reiterates, “The aim of the CGRS rating is to improve the level of corporate governance of listed companies which is a developmental index that will help to boost the company’s image and better cooperation when it needs to transact with foreign partners”.
She elucidated, “About 25 companies successfully passed the rating test, having scored the required pass mark of 70 per cent while 87 other companies are at various stages of completing the process. These 25 successful companies joined eight companies that retained their rating from the CGRS pilot in 2014, bringing the total number of companies rated now to 33. Also, 435 directors passed their certification test. The CGRS was introduced into the capital market in 2012 and was launched in 2014 with a number of volunteer companies including those listed on the Exchange premium board”.
“The period between 2000 and 2010 were difficult years for businesses around the world, littered with major corporate failures due to corruption and poor corporate governance, as well as financial crises that shook many economies. Companies have since then been evolving their ability to improve board structure and responsibility, business ethics and anti-corruption; transparency and disclosure; internal and external audit and control and ways to better protect stakeholders and shareholders’ rights. Nigerian companies have not been left out of this evolution where better business leadership and performance is expected to lead to improvements and growth in the Nigerian economy as a whole.”
She explained that the self- assessment is in three stages which is corporate compliance with its component indicator covering five categories, business ethics and anti-corruption, internal and external audit and control, shareholder and stakeholder rights, board structure and responsibilities, transparency and disclosure.
Reacting to the award, the Group Managing Director (GMD), Red Star Express Plc, Mr. Sola Obabori, appreciated NSE and CBi for deeming the company fit for the award. His words, “I, on behalf of Red Star Express Plc, appreciates the duo of NSE and CBi for deeming us fit for the rating award. We are glad we made it in the assessment and hope to keep the flag flying. The fact that we are the first logistics company in the industry to get this rating, makes it more unique and builds our confidence as a company that we are doing well. We will continue to strive for a higher level of excellence, no matter the level of competition in the industry within Nigeria”.
According to the Chief Executive Officer, Convention on Business Integrity (CBi), Mr Soji Apampa, the success rate and increased participation in the CGRS initiative is a testament to the rising acclaim that corporate governance is receiving recognition in corporate Nigeria.
He further explained, “It is important to celebrate companies and directors who are leading the renewed charge while encouraging others to participate. We will continue to celebrate companies where we notice that corporate governance is evolving nicely”.
On his part, the Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, noted that as the Exchange makes sure footed steps to globalize its market, the CGRS rating will bolster the confidence to invest in the Nigerian market especially from international investors.
He added, “Increasingly, our listed companies are meeting their compliance and requirements and we will continue to protect investors in our market through a robust regulatory regime”.
The companies that have attained the rating during the first roll out phase are Africa Prudential Plc, Continental Reinsurance Plc, Cornerstone Reinsurance Plc, custodian and Allied Plc, Dangote Sugar Refinery Plc, eTranzact International Plc, Flour Mills of Nigeria Plc, Forte Oil Plc, GlaxoSmithKline Consumer Nigeria plc, Guaranty Trust bank Plc, Guiness Nigeria plc, Honeywell Flour Mills, Lafarge Africa plc, NEM insurance plc, Nestlé Nigeria plc, Nigerian Breweries Plc, Pz Cussons plc, Red Star Express Plc, Stanbic IBTC Holdings Plc, Transcorp Hotels Plc, Unilever Nigeria Plc, United Capital Plc, WAPIC insurance plc and Wema Bank. Others that started during the pilot stage in 2014 included Access Bank, Dangote Cement, Diamond Bank, FBN holdings, AXA mansard Insurance, Nigerian Aviation Handling Company, United Bank for Africa and Zenith Bank.