Corporate Governance In Nigeria: Compliance, Accountability & Role Of The Company Secretary

As Nigeria continues to witness a steady rise in foreign direct investment, the demand for a more robust and transparent corporate governance framework has become paramount.¹ For companies operating within Nigeria, it is essential that they understand the corporate and regulatory processes necessary to ensure efficient resource management and proper accountability to their stakeholders.

In pursuit of these objectives, the role of the Company Secretary (CS) has evolved into a statutorily recognized principal officer who functions as the company's chief governance and compliance officer. This article, therefore, takes a look at the legal duties and obligations of the Company Secretary in upholding corporate compliance and accountability.

THE LEGAL FRAMEWORK FOR CORPORATE GOVERNANCE

The Nigerian corporate governance framework is regulated by the Companies and Allied Matters Act (CAMA)² and the Nigerian Code of Corporate Governance (NCCG).³

The CAMA establishes the foundational legal framework for the incorporation, administration, and compliance of all corporate entities in Nigeria. The enforcement and regulatory oversight of the CAMA is exercised by the Corporate Affairs Commission (CAC) and the Securities and Exchange Commission (SEC).

The Nigerian Code of Corporate Governance (NCCG) is another key corporate governance legislation that aims to institutionalize ethical behaviour and governance best practices. It prescribes minimum standards of conduct through a principle that is based on the "apply-and-explain" approach. This approach entails that companies must implement governance principles such as accountability and transparency, and then explain in their reports how their specific practices achieve the intended outcomes of these principles. The Financial Reporting Council (FRC) of Nigeria is empowered by its enabling legislation to issue the Nigerian Code of Corporate Governance 2018.⁴

Together, both legislations provide a detailed overarching code for corporate governance that demands meticulous adherence to statutory obligations, and thereby makes the role of the Company Secretary indispensable.

MANDATORY APPOINTMENT AND PROFESSIONAL QUALIFICATIONS OF COMPANY SECRETARIES

The provisions of the CAMA mandate the appointment of a Company Secretary (CS) for every public company.⁵ Small private companies are, however, statutorily exempted from this requirement, provided that any appointed officer possesses the requisite knowledge and experience to discharge the duties that come with the office.

It is worth noting that while private companies enjoy greater flexibility in appointments of Company Secretaries, it is considered best practice to engage a qualified professional to help navigate the complexities of Nigeria's regulatory and corporate governance processes.

To ensure the proper compliance of these processes, the CAMA prescribes that company secretaries of public companies meet any of the following professional qualifications to be considered an eligible appointee⁶:

1. A legal practitioner;
2. A member of the Institute of Chartered Secretaries and Administrators (ICSAN);
3. A member of any professional body of accountants established by an Act of the National Assembly; or
4. An individual who has held the office of secretary of a public company for at least three of the preceding five years.
5. a corporate entity or organization composed of members that meets any of the above qualifications.

The failure of a public company to appoint a CS constitutes a criminal offence.⁷ Such an infraction could expose both the company and its directors to fines and daily penalties as imposed by the CAC.

THE ROLE OF COMPANY SECRETARIES IN ENHANCING CORPORATE COMPLIANCE AND ACCOUNTABILITY

The Company Secretary serves as the "normative custodian" and primary liaison between the board of directors, management, shareholders, and regulatory authorities. The duties outlined in Section 335(1) of CAMA 2020 fall into three critical areas that drive compliance and accountability.

1. Ensuring Statutory Compliance and Regulatory Reporting: The CS oversees the company's adherence to all applicable laws and regulations, a function crucial for mitigating legal exposure and reputational damage. These responsibilities include:
2. filing Annual Returns within 42 days after the Annual General Meeting.⁸
3. notifying the CAC of changes in secretaries within 14 days.⁹
4. ensuring meticulous record-keeping of the company's statutory books and registers (including registers of members, directors, and charges).¹⁰

It should be noted that failure to comply with filing deadlines attracts penalties and may result in the company's name being struck off the register. When such negligence occurs, it is bound to jeopardize business operations and contractual relationships of the company.

• Providing Board Advisory and Administrative Support: The CS also supports the Board of Directors in establishing and maintaining a good corporate governance culture. This can be achieved by:
• organizing board meetings, preparing agendas, circulating documentation, and recording accurate minutes that serve as the official legal record of board decisions.¹¹
• providing counsel on directors' duties, ethical responsibilities, legal implications of strategic decisions, and compliance obligations. This advisory function proves to be particularly valuable for foreign directors who are largely unfamiliar with Nigerian corporate law.
• identifying potential legal, regulatory, or operational risks and advising the board on mitigation strategies to protect the company's interests.
• carrying out such administrative and other secretarial duties as directed by the director or the company.¹²

• Stakeholder Management and Accountability: The CS further acts as the chief liaison officer between the board of directors and company stakeholders (shareholders, creditors, regulators, and the investing public). This function promotes transparency and accountability through the prompt dissemination of the company's annual reports, managing timely regulatory disclosures, and handling shareholder inquiries.

FIDUCIARY DUTIES AND INTERESTS OF COMPANY SECRETARIES

According to the provisions of the CAMA, the Company Secretary is recognized as an officer of the company and assumes fiduciary duties to the company solely when acting in their capacity as its agent.¹³

The Board of Directors retains the authority to appoint, direct, remunerate, and remove the Company Secretary. This overarching power can create potential conflicts as the secretary may feel pressured to prioritize the interests of the board over those of other stakeholders.

The NCCG 2018 addresses this concern by emphasizing that the CS must have direct access to the Chairman of the Board to ensure objectivity and prevent undue influence from executive management.¹⁴ This independence provides ample wiggle-room for the secretary to provide candid guidance, particularly in situations when board decisions risk non-compliance or reputational harm.

LEGAL SAFEGUARDS AND PROTECTION MECHANISMS OF COMPANY SECRETARIES

CAMA 2020 provides significant statutory job protection for Company Secretaries of public companies through prescribed removal procedures designed to ensure procedural fairness. For a CS of a public company to be validly removed, the board must:¹⁵

1. Issue a notice stating the grounds for removal.
2. Provide the secretary at least seven working days to make a defence.
3. Provide the secretary with an option to resign from his office within seven working days.

If the secretary fails to resign his office or make a defence within the given period or make a defence, the board may remove them from office and then make a report at the next general meeting.¹⁶ On the other hand, if the secretary presents a defence and the board finds it insufficient, particularly in cases involving fraud or serious misconduct, then the board may remove him from office and then make a report at the next general meeting.¹⁷

However, if the removal is based on reasons other than fraud or serious misconduct, the board shall not remove him without the approval of the general meeting. The board may suspend him and is required to report the suspension to the next general meeting.¹⁸ Such procedural rigor helps protect the integrity of the office of the CS and prevents arbitrary dismissals that might compromise corporate governance standards.

It is also important to highlight that the CAMA does not specify a statutory removal procedure for private company secretaries. However, any removal process outlined in the company's Articles of Association must be strictly adhered to, as the articles serve as a binding contract between the company and its officers.

EVOLVING TRENDS IN CORPORATE GOVERNANCE: THE EXPANDING ROLE OF THE COMPANY SECRETARY

Corporate governance in Nigeria is shifting under the influence of technology, globalization, and sustainability considerations. The Company Secretary is no longer confined to statutory duties but increasingly participates in shaping corporate ethics, digital compliance, and ESG (Environmental, Social, and Governance) reporting.

For instance, the emergence of electronic board portals, virtual AGMs, and digital recordkeeping systems has transformed board administration. Company Secretaries now oversee data protection compliance under the Nigeria Data Protection Regulation (NDPR), ensuring that board communications and shareholder information remain secure.

ESG reporting is another growing frontier. Investors and regulators alike demand transparency on how companies address environmental impact, social responsibility, and governance integrity. The CS plays a pivotal role in coordinating ESG disclosures and aligning corporate governance practices with sustainability standards.

The office of the Company Secretary has grown to become an essential and multifaceted role within the corporate governance framework. The office stands uniquely positioned to serve not only as a compliance officer but also as a key advisor on legal, regulatory, and governance matters. Their skilful diligence ensures that the company adheres to statutory requirements and best governance practices. And given the complexity of Nigeria's corporate governance framework and the serious consequences of non-compliance, it is highly advisable that corporate entities engage experienced legal counsel to provide proper guidance.

For personalized professional guidance on corporate governance compliance, corporate structuring, and other company secretarial matters, please consult with qualified legal practitioners or a law firm specializing in corporate and commercial law.

Footnotes

1. Wasiu Alli, 'FDI Rises to 3-Year High as Reforms Boost Investor Confidence' (Business Day Nigeria, 6 August 2025) https://businessday.ng/news/article/fdi-rises-to-3-year-high-as-reforms-boost-investor-confidence/.

2. Companies and Allied Matters Act (CAMA), 2020.

3. Nigerian Code of Corporate Governance (NCCG), 2018.

4. S. 51(c), Financial Reporting Council (FRC) Nigeria Act.

5. S. 330, Companies and Allied Matters Act 2020.

6. S. 332, Companies and Allied Matters Act 2020.

7. S. 330(4), Companies and Allied Matters Act 2020.

8. S. 421(1), Companies and Allied Matters Act 2020.

9. S. 339(1), Companies and Allied Matters Act 2020.

10. S. 336 & 337, Companies and Allied Matters Act 2020.

11. S. 335(1) (a), Companies and Allied Matters Act 2020.

12. S. 335(1) (d), Companies and Allied Matters Act 2020.

13. S. 334, Companies and Allied Matters Act 2020.

14. Principles 8.1 and 8.4, Nigerian Code of Corporate Governance (NCCG) 2018.

15. S. 333(2), Companies and Allied Matters Act 2020.

16. S. 333(3), Companies and Allied Matters Act 2020.

17. S. 333(3) (a), Companies and Allied Matters Act 2020.

18. S. 333(3) (b), Companies and Allied Matters Act 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.