CBN mandates bureau de change to have board of directors, bars government, MDAs from equity ownership
NEW CODE OF CORPORATE governance released last week by the Central Bank of Nigeria (CBN) has made it mandatory for bureau de change (BDC) firms to have boards of directors.
According to a circular signed by Kevin N Amugo, director, financial policy and regulation department of the CBN addressed to all other financial institutions in Nigeria, the board of directors of a BDC must have at least a minimum of three and maximum of five members. The code also stipulates requirements guiding equity ownership of BDCs, stating, “no government, ministry, department or agency shall have direct and/or indirect equity holding in any BDC.”
Adding that “except as approved by the CBN, no individual, group of individuals, their proxies or corporate entities and/or their subsidiaries shall own controlling interest in more than one BDC.
Highlighting the composition of the board as well as an array of responsibilities, rights and management requirements, the CBN noted that BDCs should have only one executive director who will also take the position of the MD/CEO.
Bureaux de change are financial institutions licensed to carry on small-scale foreign exchange business on a stand-alone basis in Nigeria, serve as tools for the management of exchange rate and provide economic data for monetary policy decisions.
According to the CBN, their activities impact on exchange rates; hence BDCs are important players in the money market.
The CBN also noted that the new code is “to further strengthen the institutions and reposition them to perform their statutory roles.
The code will also serve as a complement to extant operational guidelines and regulations on BDC business.
As part of the requirements for appointing the board, the CBN noted that like banks, “members of the board of directors shall be appointed by the shareholders and approved by the CBN.”
The apex bank further stated that for remuneration, “MD/CEO shall not receive sitting allowances and Directors’ fees. Non-Executive Directors’ (NEDs) remuneration shall be limited to directors’ fees, sitting allowances for board meetings and reimbursable travel and hotel expenses.
NEDs shall not receive salaries and benefits whether in cash or in kind, other than those mentioned above.”
These requirements alongside several others listed on the publicised code will be effective from December 1st 2018, the CBN noted.