Fidelity Bank is awarded CG+, the highest rank under the
Corporate Governance Rating System (CGRS), which screens quoted companies
against prescribed best practices and standards.
A review of the latest compliance report showed that Fidelity Bank sustains its highest-ranking rating of CG+, with shareholders and market pundits commending the high corporate standards of the bank.
Head, Listings Regulation Department, NGX Regulation
(NGXRegco), Mr. Godstime Iwenekhai, explained that the CGRS was designed to
strengthen the governance structures of listed companies and provide a valid
basis for discerning investors to differentiate between listed companies on the
basis of their compliance with acceptable standards of corporate governance.
“In our view, corporate governance promotes ethical business
practices, transparency and fair competition,” Iwenekhai said.
He pointed out that the special character combination “CG+”
underlined compliance with best practices and highest corporate governance
standards, which entitle the rated companies to special privileges at the stock
market.
Corporate governance compliance at the stock market includes
prompt submission of detailed operational results from period to period as
required by the market rules, full disclosures of all material and regulated
information and accurate rendition of reports and accounts.
Also, compliance includes ensuring that the company’s shares
are not encumbered in a way that impinges on free float or number of shares
available to the general investing public for efficient price discovery,
compliance with all investor-protection safeguards in communication with
shareholders and organizing statutory meetings as required among others.
The Nigerian Exchange (NGX) noted that compliance tracker was
aimed at maintaining market integrity and protecting the investors, noting that
listed companies are required to adhere to high disclosure standards.
“Financial information which is periodic disclosure and
on-going material events disclosure should be released to NGX in a timely
manner to enable it efficiently perform its function of maintaining an orderly
market,” NGX stated, referencing some of the criteria for its corporate
governance rating.
Market experts and shareholders agreed that corporate
governance compliance is a major factor in deciding on investing in a public
and the safety of such investment.
Managing Director, Arthur Steven Asset Management, Mr.
Olatunde Amolegbe, said corporate governance compliance rating is “extremely
important” as it indicates to the investing public the quality of compliance of
a company to listing requirements.
“As you know, stock prices are driven primarily by available
information and the NGX has a minimum level of disclosure expected of quoted
companies. This disclosure helps the public make qualitative decisions as to
the state or performance of the companies they are seeking to invest in. These
markers are therefore the initial indicators as to whether the companies are
meeting their disclosures and other regulatory obligations or not,” Amolegbe, a
former president of Chartered Institute of Stockbrokers (CIS), said.
Managing Director, APT Securities & Funds, Mallam Garba
Kurfi, said the corporate governance rating “shows the extent companies are in
compliance with corporate governance”.
“High rating means very good in doing right thing timely while
low rating discourages foreign investors from investing in such companies,”
Kurfi, a leading market operator and member of the board of Securities and
Exchange Commission (SEC), said.
Managing Director, HighCap Securities, Mr David Adonri, noted
that “CG+ means excellent corporate governance rating”.
“When a company is organised and uphold good corporate
governance, the benefit to stakeholders is maximized,” Adonri said.
Investors said its high corporate governance was one of the
compelling reasons they chose to invest in Fidelity Bank.
President, Association for the Advancement of Rights of
Nigerian Shareholders (AARNS), Dr. Faruk Umar said Fidelity Bank has a very
good corporate governance structure that reassures investors of the safety of
their investments.
According to him, while the bank has good succession plan, the
calibre of the independent non-executive directors on the board gives
shareholders strong confidence of the kind of board oversight they will be
expecting.
National Coordinator, Independent Shareholders Association of
Nigeria (ISAN), Mr. Moses Igbrude, said Fidelity Bank’s impressive performance
over the years had been built on good corporate governance.
“My appeal to the board is to continue to imbibe good
corporate governance in order to sustain this growth,” Igbrude said.
National Coordinator, Pragmatic Shareholders Association of
Nigeria, Mrs. Bisi Bakare, said Fidelity Bank has created a “very excellent
impression” in the minds of shareholders.
According to her, the bank has continually showcased exemplary
leadership with continuous impressive results, with successive growths over the
past five years.
“Fidelity Bank is a very good bank that shareholders are very
happy with their investments and we have never regretted buying into Fidelity
Bank,” Bakare said.
National Coordinator, Progressive Shareholders Association of
Nigeria, Mr. Boniface Okezie said good corporate governance was the cornerstone
of Fidelity Bank’s sustained growth and impressive returns over the years.
“Fidelity Bank remains one of the best stocks that investors
should look forward to invest in for better returns. I'm very optimistic of the
bank’s healthy strong assets. With its good corporate governance and excellent
customers’ service, there is every reason to hope for more promising future,”
Okezie said.
The NGX tags defaulting companies for poor corporate
governance and also applies various monetary and non-monetary sanctions,
including fines ranging between N100,000 to N100 million, partial or full
suspension of trading, naming and shaming with a red alert tag and compulsory
delisting in extreme cases.
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