NSE transition raises Corporate Governance Issues

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Stakeholders seek seamless transfer of office to incoming DG Now that the director-general of the Nigerian Stock Exchange (NSE), Ndi Okereke-Onyiuke, has announced her exit from the Exchange, stakeholders in the market are already looking forward to a transitional programme that would ensure a seamless transfer of office to the incoming director-general.

Those who spoke to BusinessDay on the proposed demutualisation of the NSE observed that the role of every member making up the Exchange including stockbroking firms should be firmly re-established and corporate governance entrenched in the management of the Exchange.Okereke-Onyiuke last week, at the annual yearly briefing informed journalists that she would leave office on November 2, 2010 when she would have been 60 years old.With the suspension of the demutualisation exercise, informed sources at the NSE disclosed that the Exchange is currently thinking of appointing independent directors to the Council of the Exchange prior to demutualisation. Indeed, two people were recently recruited to the management cadre in an apparent move to strengthen the management. They are Ebele Ogamba, who was on sabbatical from the University of Nigeria, Nsukka, but has now been retained as a principal manager, and Kingsley Nwokocha who is now an assistant general manager.

However, keen observers of the Nigerian capital market say for the NSE to experience another uninterrupted squeamish bull market there must be major structural changes and transparency at the Exchange. It was gathered that the Council of the Exchange has not fully endorsed the idea of appointing independent directors because some senior stockbrokers on the council are of the opinion that appointment of directors should be deferred pending when a substantive director general would be appointed."Some of the stockbrokers feel the current DG may proceed on her terminal leave before her final exit and considering that she does not want the assistant director-general, Musa Elakama, to succeed her, that may leave some issues unresolved," said a stockbroker who preferred not to be named. On the other hand, the demutualisation of the NSE has also thrown up the issue of corporate governance which some observers believed had not been fully entrenched at the NSE.

Victor Ogiemwonyi, managing director of Partnership Capital Limited, said: "The idea of demutualisation is to make the market more efficient and transparent because it would become a public-interest institution that would have everybody holding the shares. The NSE as it is now is run as a mutual organisation because it is 'supposedly' owned by the stockbrokers." According to him, demutualisation would also encourage a fair appraisal of the market.

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