NGX rates Fidelity Bank highest on corporate governance

Fidelity Bank has been awarded CG+, the highest rank under the Corporate Governance Rating System (CGRS), by the Nigerian Exchange Limited (NGX).

Fidelity Bank made this known via a statement on Thursday, August 22, 2024.

A review of the latest compliance report showed that Fidelity Bank sustained its highest-ranking rating of CG+, with shareholders and market pundits commending the high corporate standards of the bank.

The Head of Listings Regulation Department, NGX Regulation (NGXRegco), Godstime Iwenekhai, said the CGRS was designed to strengthen the governance structures of listed companies and provide a valid basis for discerning investors to differentiate between listed companies on the basis of their compliance with acceptable standards of corporate governance.

“In our view, corporate governance promotes ethical business practices, transparency and fair competition,” Iwenekhai said.

He stated that the special character combination CG+ underlined compliance with best practices and the highest corporate governance standards, which entitle the rated companies to special privileges in the stock market.

Corporate governance compliance at the stock market includes prompt submission of detailed operational results from period to period as required by the market rules, full disclosures of all material and regulated information and accurate rendition of reports and accounts.

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The compliance also includes ensuring that the company’s shares are not encumbered in a way that impinges on free float or number of shares available to the general investing public for efficient price discovery, compliance with all investor-protection safeguards in communication with shareholders, and organising statutory meetings as required among others.

The NGX noted that the compliance tracker was aimed at maintaining market integrity and protecting the investors, saying listed companies are required to adhere to high disclosure standards.

“Financial information which is periodic disclosure and ongoing material events disclosure should be released to NGX in a timely manner to enable it to efficiently perform its function of maintaining an orderly market,” the NGX said, referencing some of the criteria for its corporate governance rating.

On his part, the Managing Director of Arthur Steven Asset Management, Olatunde Amolegbe, said corporate governance compliance rating is “extremely important” as it indicates to the investing public the quality of compliance of a company to listing requirements.

Amolegbe, a former President of the Chartered Institute of Stockbrokers (CIS), said: “As you know, stock prices are driven primarily by available information and the NGX has a minimum level of disclosure expected of quoted companies.

“This disclosure helps the public make qualitative decisions as to the state or performance of the companies they are seeking to invest in. These markers are therefore the initial indicators as to whether the companies are meeting their disclosures and other regulatory obligations or not.”

Investors further stated that the bank’s high corporate governance was one of the compelling reasons they chose to invest in Fidelity Bank.

The Star