WorldStage– UPDC Plc, a leading Nigerian property development company, refused to appoint an independent non-executive director (INED) to its board for the fifth time, violating the corporate governance principles, and risking a N10 million fine.
The estate firm stated in its 2025 corporate governance compliance report the requirement does not apply to its board, a culture it has sustained at least since 2021.
The Financial Reporting Council of Nigeria (FRCN) recommends companies filing governance report take the Apply and Explain approach which assumes application of all principles, and explanation of their application.
“Not applicable is not a valid response,” the council stated in its reporting template.
The repeated disregard for the Nigeria Code of Corporate Governance (NCCG 2018) Principles 2 and 7 robs the company’s shareholders the clarity of view they need.
“Independent Non-Executive Directors bring a high degree of objectivity to the board for sustaining stakeholders confidence,” Principle 7 states.
Principle 2 recommends in section 3b an “Appropriate mix of Executive, Non-Executive and Independent Non-Executive members such that majority of the Board are Non-Executive Directors. It is desirable that most of the Non-Executive Directors are independent.”
But for five years in a row, UPDC has maintained a six-member board comprising five NEDs and one executive director, stating “not applicable” in the FRCN reporting template.
The FRCN Amendment Act 223 provides for sanctions on non-compliant companies, including a N10 million fine or even prosecution.
It is, however, rare to see the record of this enforcement.
