The Senate Committee on Banking, Insurance, and other Financial Institutions has pledged to review the Companies and Allied Matters Act (CAMA) to grant shareholders additional capacity to oversee their business investments effectively.
This commitment was made during interactions between the committee, chaired by Senator Mukhail Adetokunbo Abiru, and the board members of the Bank Directors Association of Nigeria (LTD/GTE), led by Chairman Mr. Mustafa Chike-Obi.
Chike-Obi highlighted challenges facing the banking industry, emphasizing the urgent need to amend the CAMA Act in line with current realities. He pointed out a discrepancy in the Act, which mandates one-third of all directors of companies, including banks, to be independent. However, in practice, half of bank directors are typically executive directors, leading to a situation where only a fraction of the board is truly independent.
Advocating for a review of the law, Chike-Obi proposed that one-third of non-executive directors should be independent, providing shareholders with a more significant voice in board matters. He expressed shareholders’ concerns over limited representation on boards, where executive directors often outnumber independent ones.
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In response, Senator Abiru assured the Bank Directors that the Senate is actively amending key financial legislation, including the Nigerian Deposit Insurance Corporation Act (NDIC) and the Central Bank of Nigeria (CBN) Act. He committed to examining the CAMA Act to align it with present-day needs and realities.
Highlighting the government’s vision of achieving a 1 trillion-dollar economy within eight years, Senator Abiru emphasized the importance of raising capital to support this objective. He stressed the need for synergy between measures to combat inflation and stimulate GDP growth, underscoring the Senate’s commitment to ensuring alignment between fiscal and monetary policies.
Senator Abiru concluded by assuring stakeholders that the Senate would address the identified challenges through the ongoing legislative amendments. The committee aims to enhance regulatory frameworks to empower shareholders, promote transparency, and foster sustainable growth in the banking sector, ultimately contributing to Nigeria’s economic development goals.
