Tuesday, June 3, 2025 - The Nigerian Electricity Regulatory Commission (NERC) has issued a directive restricting individuals from serving as directors on more than two boards within the Nigerian Electricity Supply Industry (NESI).
The policy was outlined in the commission’s newly
released Code of Corporate Governance report dated May 30.
According to the report, the move aims to prevent conflicts
of interest and ensure that directors can carry out their responsibilities
effectively and impartially. “An individual shall not concurrently serve as a
director of more than two companies in NESI,” the report stated. “Simultaneous
service on numerous boards may impede an individual’s capacity to discharge
their duties equitably and impartially, potentially leading to conflicts of
interest.”
NERC emphasised the importance of proper vetting of board
nominees, urging companies and shareholders to carefully evaluate candidates’
existing commitments before approving their appointments. “The board and
shareholders must thoroughly assess the suitability of nominees for
appointment, taking into account their other obligations and commitments,” it
said.
The report also requires prospective board nominees to
disclose any current board memberships prior to their appointment. “The board
shall consider the nominee’s other directorships and ascertain whether the
nominee can effectively contribute to the board’s performance and
responsibilities prior to endorsing them for appointment,” the commission said.
“Serving directors shall inform the board, through the chairman, of any
potential appointments to other boards.”
NERC added that individuals already serving as directors on more than two boards within the industry must disclose any further appointments to their respective boards through the chairman. The commission reiterated that all directors are expected to avoid any form of conflict of interest, whether directly or indirectly, due to affiliations with other entities.
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