Vacancy in the CEO position at Globacom may lead to penalties from NCC, following a 24-month stipulation.
Globacom Faces 24-Month Deadline to Separate Board Chairman and CEO Roles
The Nigerian Communications Commission (NCC) has issued new corporate governance rules for the telecom sector, mandating a separation of the roles of Board Chairman and Chief Executive Officer (CEO) at Globacom within 24 months.
Under these new rules, Globacom can no longer have the same person serving as both chairman and CEO. The Chairman must be a non-executive director (NED) elected by the board and cannot exercise executive powers, while the CEO is responsible for daily operations and must be a distinct individual.
This regulatory mandate is part of a broader industry-wide shift emphasizing corporate accountability and governance reform across Nigerian telecom operators.
Organizational Restructuring Ahead for Globacom
Globacom must undergo significant adjustment to split leadership responsibilities that have traditionally been combined since the company’s inception. This restructuring will involve identifying and appointing a qualified CEO, if one is not already distinct from the chairman.
Enhanced Board Composition Requirements
The NCC mandates that the board of every licensed telecom operator must consist of at least five members. The number of non-executive directors must exceed that of executive directors, and at least one-third of the board must be independent. At least two non-executive directors should have relevant expertise in ICT and cybersecurity.
Increased Corporate Governance Standards
The separation aims to establish robust checks and balances, reduce conflicts of interest, and improve accountability and transparency, aligning Globacom with international governance best practices.
Regulatory Compliance Risk
Failure to comply within the 24-month deadline exposes Globacom to potential sanctions, details of which the NCC may clarify later.
Enforcement Powers and Consequences
In the case of serious breaches, the Commission reserves the right to order changes in a licensee's management within a specified period. The NCC's enforcement powers under the new guidelines are extensive, with failure to comply attracting sanctions ranging from fines to suspension or revocation of operating licenses.
Globacom did not respond to a request for comments regarding the new rules.
This regulatory mandate underscores the need for Globacom to balance implementing this separation smoothly while maintaining competitive operational performance in Nigeria’s dynamic telecom market. The long-standing concentration of executive power has been a source of governance concerns, and this move towards greater accountability and transparency is expected to bring about positive changes in the sector.
- The regulatory mandate for Globacom, requiring the separation of the Chairman and CEO roles, is part of a broader industry-wide shift towards enhancing corporate governance in the Nigerian telecom sector, particularly focused on ICT and cybersecurity expertise.
- In light of the new rules, Globacom must ensure that their board composition meets the NCC's requirements, including having at least two non-executive directors with relevant expertise in ICT and cybersecurity.
- As Globacom undergoes organizational restructuring to comply with the new rules, the company faces the challenge of balancing the implementation of the separation while maintaining competitive operational performance in the mobile, technology, finance, and general-news sectors.
