The Nigerian Electricity Regulatory Commission (NERC) has introduced a new rule that stops individuals from serving as directors on more than two boards within the Nigerian Electricity Supply Industry (NESI). This guideline is part of NERC’s Code of Corporate Governance report, released on May 30.
The rule aims to prevent conflicts of interest and ensure directors can fulfil their duties effectively and fairly. According to the report, holding multiple board positions in NESI may reduce a director’s ability to act impartially and responsibly.
NERC urges companies and shareholders to carefully review candidates’ current commitments before approving their appointments. Prospective directors must disclose all existing board memberships before joining a new board. Boards are required to assess whether nominees can fully contribute to their responsibilities without divided loyalties.
Directors already on more than two boards must inform their boards through the chairman about any new appointments. NERC stresses that all directors should avoid conflicts of interest, whether direct or indirect, related to other business affiliations.
This move by NERC seeks to strengthen governance and accountability in Nigeria’s power sector.
