CORPORATE GOVERNANCE
Berger Paints Nigeria Plc. (“BPN or the Company”) being a frontline Paints Manufacturing institution is managed based on high level of professional ethics, transparency, and international best governance practices.
Corporate Governance Framework: The Corporate Governance Framework is an internal code that defines the relationship between the Board of Directors, Management and other Stakeholders of the Company. It seeks to ensure accountability of the Board of Directors and Management of the Company to other Stakeholders who do not have oversight obligations or management powers and take these sets of individuals aforementioned as their due representatives.
Objectives of the Corporate Governance Framework
The Company is governed by: (1) the Board of Directors; (2) the Committees of the Board; and (3) the Management Committee (MANCO) comprising Senior Management Staff of the Company. Each governing body is governed by a charter, which outlines the authority, responsibilities, composition and operations of the respective members.
THE BOARD OF DIRECTORS
Membership of the Board of Directors
Subject to the Memorandum and Articles of the Company the Board of Directors shall comprise of a Chairman who shall be a Non-Executive Director appointed from the body of Directors and who shall be the Chairman of the Board of Directors of the Company, Non – Executive Directors, Non-Executive Independent Directors and the Executive Directors.
THE BOARD CHARTER
The primary purpose of the Board is to build long term shareholders’ value and ensure oversight of the Management. The Board shall ensure adequate systems; policies and procedures are put in place to safeguard the assets and investment of the company.
Responsibilities of the Board: The principal responsibilities of the Board shall be to consider, approve and oversee the implementation of strategies and objectives for the Company. This includes the following:
Responsibilities of individual directors: Below are some of the responsibilities of each director;
Delegation to Management
The Board delegates to the Managing Director (MD), the authority to manage the day to day business affairs of the Company subject to such specific delegations and limits that the Board makes from time to time, The MD has authority to sub-delegate such authority and power to such members of the executive management team as he/she shall determine from time to time.
Re-election of Directors
The process for re-election of a director shall be in accordance with Section 285 of the Companies and Allied Matters Act, 2020 (CAMA), which provides that all the directors shall at the first Annual General Meeting retire from office and at subsequent AGMs, one third of them, or if their number is not three or a multiple of three, the number nearest to one-third shall retire.
Directors up for retirement by rotation shall be those who have been longest in office since the date of their last election. As between persons who became directors on the same day, those to retire shall unless they otherwise agreed, be determined by a lot.
Board Performance Appraisal
A Board appraisal is usually undertaken annually, covering the Board and its Committee’s structure, composition, responsibilities, processes and relationships in the Board performance. This assessment shall be made in relation to individual directors’ performance and the Board’s performance as a whole.
This review would be carried out by an external independent consultant, supervised by the Company Secretary and the report would be presented at the Annual General Meeting (AGM).
Removal of directors
The process for the removal of a Director is in accordance with the provisions of Section 288 of CAMA.
THE COMPANY SECRETARY/ LEGAL ADVISER
All Directors have direct access to the Company Secretary/Legal Adviser, who shall be accountable to the Board, through the Chairman, on all Corporate Governance and secretarial matters. The Company Secretary provides directors with guidance on their responsibilities, ethics and good governance. He is responsible to the Board for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with.
He shall play an active role in the directors training and strategic administrative planning.
The appointment and removal of the Company Secretary/Legal Adviser shall be governed by the provisions of the CAMA.
Board’s General Powers
The Board makes final approval of all matters delegated to Board Committees and the Managing Director. These powers shall be subject to CAMA and the Memorandum and Articles of Association of the Company.
COMMITTEES OF THE BOARD
In executing its oversight functions and in compliance with the regulations guiding the Company, the Board of Directors shall establish Committees of the Board as may be required but which at the minimum shall be:
Each of the Committees is governed by a Charter approved by the Board of Directors that delineate the structure, membership, obligations, expected skills of the Members, removal/resignation, proceedings, approval limits and scope of duties.
The Board Establishment, Remuneration & Governance Committee
The purpose of the Committee is to advise the Board on its oversight responsibilities in relation to recruitment, compensation and benefits, promotions and disciplinary issues affecting senior officers of the company on Manager grade and above.
The Committee also considers the nomination of new directors to the Board, succession planning for key positions on the Board, training of directors, recommending director’s remuneration and overseeing board performance and evaluation. The purpose of the Committee also includes the development and maintenance of appropriate corporate governance framework for the Company and ensuring compliance with extant Codes of corporate governance.
The functions of the Committee are divided categorized under 4 broad headings, namely:
The tenure and membership of the Committee shall be determined by the board.
In determining the membership of the Committee, the Board shall take care to ensure that the Committee shall comprise of members representing balanced views, knowledge of credit, investment, finance and general management or entrepreneurial experience.
The Company Secretary/ Legal Adviser shall serve as secretary to the committee
The Board shall review and re-assess the Charter at least once every four years as it may be necessary and make recommendations to the Board on required changes.
The Board Finance and General Purpose Committee
The purpose of the Committee is to consider the company’s overall financial performance, capital and operating expenditures, investments proposals and to consider placement of funds proposals as referred to it by the Management Committee and make recommendations to the Board on same.
In performing its oversight role, the Committee shall work with the Management to review the quality and process employed
The following are some of the responsibilities of the committee;
The membership and tenure of the Committee shall be determined by the Board.
In determining the membership of the Committee, the Board shall take care to ensure that the Committee shall comprise of members representing balanced views, knowledge of credit, investment, finance and general management or entrepreneurial experience.
The Board shall review and re-assess the Charter at least once every four years as it may be necessary and make recommendations to the Board on required changes.
Board Audit and Risk Management Committee.
The purpose of the Committee is to consider the Company’s long term strategy, risks and opportunities relating to the strategy, assist in the identification, evaluation and mitigation of strategic, operational, and external environment risks and monitor the strategy and risk management framework and associated practices of the Company.
In performing its oversight role, the Committee shall work with the Management to review the quality and processes employed. The following are some of the responsibilities of the committee;
The membership and tenure of the Committee shall be determined by the Board. In determining the membership of the Committee, the Board ensures that the Committee shall comprise of members representing balanced views, knowledge of Audit, Risk Management and Strategic Planning experience.
At least one (1) member should possess deep knowledge of Risk Management and Strategic Planning matters. The Board shall determine the Chairman of the Committee. Where the Chairman is absent from a meeting, members of the committee shall choose any one of themselves to act as Chairman for that particular meeting.
The Company Secretary shall serve as the secretary to the committee.
The Board shall review and re-assess the Charter at least once every four years as it may be necessary and make recommendations to the Board on required changes.
The Company Secretary serve as the secretary to all Board Committees.
MANAGEMENT COMMITTEE (MANCO)
The primary purpose of the Committee shall be to deliberate and take policy decisions on the effective and efficient day to day management of BPN. Some of the Committee’s primary responsibilities shall be to;
Responsibilities of the Committee: In addition to its primary responsibilities listed above, the Committee shall be responsible for the following:
Composition of the Committee
The Committee shall be consisted of the Managing Director/ Chief Executive Officer, (Chairman), and all Heads of Departments
The Company Secretariat serves as the secretary to the committee.
The Committee has the power to take independent advice from, or to retain the services of such independent or external professional advice at the expense of BPN, as it deems necessary to carry out its duties.
Reporting and accountability
Highlights of the MANCO meetings and actions taken by the MANCO usually forms part of the MD/CEO’s update at the next meeting of the Board.
STATUTORY AUDIT COMMITTEE
Berger Paints Nigeria Plc’s (‘BPN’ or ‘Company’) Statutory Audit Committee is a Committee consisting of two Directors and three representatives of the shareholders of BPN in line with Section 404 (2) of CAMA 2020.
The Committee has the key objective of ensuring the integrity and efficiency of the audit process. It has oversight responsibility for the Company’s financial statements, ensuring that it is prepared in accordance with the legal and accounting requirements and agreed ethical policies.
Authority of the Committee
The Committee has authority to investigate any matter within its responsibilities and to obtain such information as it may require from any director, officer or employee of the Company.
Committee reporting
The Audit Committee shall strive to ensure its independence from the Board and Management. The Committee shall only report to the shareholders in line with the provisions of Section 404 (4) of CAMA, 2020.
Responsibilities of the Committee- Below are some of the responsibilities of the Statutory Audit Committee
The Company Secretary/Legal Adviser or any other person so delegated, shall serve as the secretary to the Committee.
Chairman’s eligibility and terms of appointment
The Chairman of the Committee is usually appointed from among the shareholders’ representatives. Where the Chairman of the Committee is absent from a meeting, the members of the Committee present at the meeting shall have authority to choose one of the shareholders’ representatives to be the Chairman for that particular meeting.
Tenure
Each member of the Committee serves for a year but may be re-elected.
POLICIES OF BPN (‘The Company’’)
The following policies are instrumental in conducting the affairs of the Company;
COMPLAINTS AND MANAGEMENT POLICY
The Complaint Management Policy (“the Policy”) was prepared pursuant to the requirements of the Securities & Exchange Commission’s Rules Relating to the Complaints Management Framework of the Nigerian Capital Market (“SEC Rules”) issued on February 16th 2015 and the Nigerian Stock Exchange Directive (NSE/LARD/LRD/CIR6/15/04/22) to all Listed Companies (“the NSE Directive”) issued on 22nd April, 2015. Furthermore, it was prepared in recognition of the importance of effective engagement in promoting shareholder/investor confidence in the company.
Scope
This Policy sets out the broad framework by which Berger Paints Plc (“BPN” or “the Company”) and its registrar provides assistance regarding shareholders’ issues and concerns. It also provides the opportunity for BPN’s shareholders to provide feedback to the Company on matters that affect shareholders. Complaints that are subjudice or do not fall within the purview of SEC or NSE are outside the scope of this Policy.
Procedure for Shareholder Complaints/Enquiries
Shareholders who wish to make a complaint or an enquiry should in the first instance contact the registrar, who manages all the registered information relating to all shareholdings, including shareholders’ contact details and dividend payment instructions. Upon receipt of a complaint or an enquiry, the Registrar shall immediately provide the relevant details of such complaint or enquiry to BPN for monitoring, record keeping and reporting purposes.
In resolving complaints or enquiries, the Registrar shall be guided by the timelines stipulated in this Policy. If the registrar is unable to satisfactorily address shareholders’ enquiries and resolve their complaints, then shareholders should contact the Office of the Company Secretary.
In order to effectively assist with the resolution of complaints, all material facts and supporting documents should be included. In addition, the complaint must be signed and dated and include the name, phone number, physical and email address of the complainant.
Complaints/Enquiries Received Directly by BPN
Where a complaint or an enquiry is sent to BPN directly, the company shall use its best endeavors to ensure that:
Where a complaint/enquiry cannot be resolved within the stipulated time frame set out above, the shareholder shall be notified that the matter is being investigated. Delays may be experienced in some situations, including where documents need to be retrieved from storage or third parties.
Electronic Complaints Register and Quarterly Reporting Obligations
BPN maintains an electronic complaints register which includes the:
Information on the details and status of complaints are provided to the Nigerian Stock Exchange on a quarterly basis.
Fees and Charges
Wherever possible, and subject to statutory requirements, BPN will not charge shareholders for making enquiries or providing a response in the course of resolving a shareholder issue. Shareholders should note that in some circumstances the registrar may charge shareholders a fee (for example, to resend previous dividend statements further to a request by the shareholder)
WHISTLE BLOWING POLICY
Berger Paints Nigeria Plc. recognizes that the decision to report a concern can be a difficult one to make mostly out of fear of victimization. However, the company is unequivocally committed and undertakes to protect all whistle-blowers.
Berger Paints Nigeria Plc. will not tolerate any harassment or victimization (including informal pressures) and will take appropriate steps to protect any employee and/or stakeholder who alerts the company of any danger, wrong, fraud or threat of fraud.
Confidentiality
All information will be treated in strict confidence while the identity of the whistle-blower is protected. This policy encourages the giver of an information to include their name, address and phone number when passing on any information to the company. However, as a matter of honor,
How to raise Concern(s)
Members of staff are expected to first raise concerns with their immediate supervisor/manager or their superior. For example, if they believe that management is involved, they should approach the Board or a Board member.
Protection for Whistle Blowers
BPN has an obligation to adequately protect the Whistle Blower. Therefore, reprisal against any employee who in good faith reports a concern about illegal or unethical conduct will not be tolerated.
The Company is also committed to maintaining confidentiality to the fullest extent possible and provides assurance that all reports will be subject to appropriate investigation and conclusion though an efficient process.
Therefore, whistle Blowers are encouraged to disclose their names when filing reports to enhance credibility. However, anonymous disclosures may be considered on the following discretionary basis:
Whistle Blowers either Internal or External may be rewarded depending on the gravity of the case. Compensation may also be provided to Whistle Blowers who may have suffered loss in the course of the process. This is however at the discretion of management.
CONFLICT OF INTEREST POLICY
The Conflict of Interest and Related Party Transaction Policy was developed to provide a guideline for managing potential conflict of interest situation on the Board.
The aim of the policy is to assist the Board in understanding, reviewing, approving and ratifying related person transactions, to ensure that all related party transactions are conducted at arm’s length and do not present a conflict of interest for the related party, considering the size of the transaction, the overall financial position of the third party, and the direct or indirect nature of the related party’s interest in the transaction.
The company has developed a procedure to deal with conflict of interest:
DIRECTORS’ REMUNERATION POLICY
Policy is designed to establish a framework for remuneration that is consistent with the Company’s scale and scope of operations, meets the recruitment needs of the business and is aligned with leading corporate governance practices particularly the Financial Reporting Council of Nigeria (FRCN)’s Code of Corporate Governance.
Remuneration structure;
Non-Executive Directors Remuneration
Directors’ Exit Benefits
The Board through the Board Establishment and Governance Committee determines from time to time, the payment to retiring directors, of a discretionary ‘Ex Gratia’ sum calculated based on the number of years served on the Board and payable to retiring directors for every year served on the Board. This payment is subject to the approval of the Shareholders at the general meeting. In calculating the Ex Gratia sum payable, cognizance will be taken of additional Months served and pro-rated.
EXTERNAL AUDITORS’ INDEPENDENCE POLICY
Berger Paints Nigeria Plc. (“BPN or the Company”) is fully committed to securing the integrity of the audit process and the total independence of its external auditors. This External Auditors’ Independence Policy (“Policy”) thus seeks to safeguard the independence of the External Auditors from influence in the performance of their responsibilities to the Company.
The Policy is aimed at:
Safeguarding Auditors’ Independence
The following measures have been put in place to ensure that the independence of auditors is safely guarded:
Prohibited Services– External Auditors are not allowed to provide services that shall amount to conflict of interest. Services such as book keeping or other services related to the accounting records or financial statements of the company, appraisal or valuation services, fairness opinion or contribution-in-kind reports, actuarial services, internal audit outsourcing services, management or human resource functions, broker, dealer or investment banking services, and legal or expert services unrelated to the Audit.
In addition to these specific prohibited services, the Statutory Audit Committee shall consider whether any service provided by the Audit firm may impair the firm’s independence in fact or appearance.
All audit and non-audit work (including fees and conditions) to be carried out by the external auditors shall be approved by the full Board of BPN on the recommendation of the Board Audit Committee.
Prohibited relationships
Disclosures
At least annually, and prior to the issuance of the Audit Report, the Auditors shall disclose in writing to the Statutory Audit Committee all relationships between the Auditors and other parties that may affect their independence.
The Auditors shall confirm and discuss their independence in writing with the Statutory Audit Committee including but not limited to audit planning, audit execution, audit quality and remuneration and that there was no unreasonable restriction by the Board and Management of BPN.
Tenure & Rotation
The Lead Audit Partners may be rotated periodically and shall be replaced after five (5) years, the external Auditor shall be replaced after ten (10) years and can only be re-appointed after ten (10) years.
Implementation of Policy: The Internal Auditor monitors the implementation of this policy and includes a compliance status in its quarterly report to the Statutory Audit Committee.
Review of Policy: The Statutory Audit Committee reviews this policy at least once every four years or as may be required to ensure that it remains relevant and appropriate. All changes and approvals are signed by the Chairman of the Statutory Audit Committee and countersigned by the Chairman of the Board of Directors following deliberations and approval by the full Board.