The Nigerian Communications Commission (NCC) is preparing to issue a revised corporate governance code, updating the last code from 2016 with a key focus on the introduction of mandatory sustainability reporting for telecom operators.
This initiative is designed to align the sector with global environmental, social, and governance (ESG) standards, promoting greater transparency and supporting sustainable development within Nigeria’s telecommunications landscape.
Dr. Aminu Maida, Executive Vice Chairman and CEO of the NCC, made this announcement during his address at the 2024 Annual Corporate Governance Conference, themed “Corporate Survival and Sustainability: The New Face of Governance.”
Sustainability reporting involves organizations disclosing information about their environmental, social, and governance (ESG) performance. This practice provides stakeholders—including investors, customers, and regulators with insights into how telecom operators manage risks and opportunities related to sustainability. Key components include reporting on carbon emissions, resource usage, labor practices, community engagement, and data privacy.
He emphasized the importance of sustainability in corporate governance, highlighting that such practices are no longer optional but essential for the long-term success of telecom companies.
Analyzing corporate governance
Dr. Maida presented findings from a comprehensive NCC analysis evaluating corporate governance among telecom operators. Key indicators examined included board composition, diversity, effectiveness, ethical conduct, compliance, risk management, and corporate social responsibility.
The analysis revealed a strong correlation between effective governance and regulatory compliance, with some companies not excelling in governance facing poor financial performance. This highlights that good governance is not merely a regulatory obligation but a strategic necessity for sustainable business success.
Dr. Maida outlined essential components shaping the future of corporate governance in the telecom sector:
Adaptability: As digital transformation and emerging technologies redefine the landscape, governance frameworks must be flexible to adapt to these changes while ensuring accountability.
Data privacy and security: With telecom operators handling vast amounts of sensitive data, robust data protection measures are imperative. Dr. Maida warned that data breaches could have dire consequences for both individual companies and the sector as a whole. He emphasized the need for governance frameworks to prioritize data security through comprehensive internal policies and compliance protocols.
To conclude he said, “Corporate governance is not just a regulatory organization, it is the foundation for the success and sustainability of our industry”.
Completion of NIN-SIM linkage
Dr. Maida also reflected on the successful completion of the NIN-SIM linkage initiative, which was mandated by the federal government in 2020. He acknowledged the various challenges encountered during this implementation, which required all phone numbers to be linked to verified NINs.
“While this process was difficult for many, it is essential to recognize the value this initiative brings. Today, every phone number can be associated with a verified NIN,” he stated. The initiative, launched in December 2020, aimed to block unregistered SIM cards and those without linked NIN.
Dr. Maida emphasized the impressive evolution of Nigeria’s telecommunications industry since its liberalization in 2001. “From just 305,000 active phone lines in 2001, we now boast over 150 million active telecom subscribers,” he stated. This significant growth reflects the sector’s vital contributions to Nigeria’s Gross Domestic Product (GDP) and its pivotal role in creating jobs and empowering the economy.
Tackling fraud in mobile transactions
Dr. Maida also addressed the increasing problem of fraud in mobile financial transactions. With mobile channels becoming the primary mode for banking whether through mobile apps or USSD codes the NCC is collaborating with the Central Bank of Nigeria (CBN) to develop a robust framework to combat fraud in mobile financial services.
“The majority of financial services are accessed via mobile, which ties back to the phone numbers used for these transactions,” he explained. He acknowledged that the current system lacks effective consequences for phone numbers involved in fraudulent activities, stressing the need for stronger enforcement measures.