FCMB : FCMB GROUP PLC - REPORT ON COMPLIANCE WITH THE NCCG CODE FYE 2023

FINANCIAL REPORTING COUNCIL OF NIGERIA (Federal Ministry of Industry, Trade & Investment)

FRC/CG/001: TEMPLATE FOR REPORTING COMPLIANCE WITH THE NIGERIAN CODE OF

CORPORATE GOVERNANCE 2018

Section A: Introduction

Corporate Governance is a key driver of corporate accountability and business prosperity. The Nigerian Code of Corporate Governance, 2018 (NCCG 2018) seeks to institutionalize corporate governance best practices in Nigerian companies. It is also aimed at increasing entities' levels of transparency, trust and integrity, and create an environment for sustainable business operations.

The Code adopts a principle-based approach in specifying minimum standards of practice that companies should adopt. Where so required, companies are required to adopt the "Apply and Explain" approach in reporting on compliance with the Code. The 'Apply and Explain' approach assumes application of all principles and requires entities to explain how the principles are applied. This requires companies to demonstrate how the specific activities they have undertaken best achieve the outcomes intended by the corporate governance principles specified in the Code.

This will help to prevent a 'box ticking' exercise as companies deliberately consider how they have (or have not) achieved the intended outcomes. Although, the Code recommends practices to enable companies apply the principles, it recognises that these practices can be tailored to meet industry or company needs. The Code is thus scalable to suit the type, size and growth phase of each company while still achieving the outcomes envisaged by the principles.

This form seeks to assess the company's level of compliance with the principles in the NCCG 2018. Entities should explain how these principles have been applied, specify areas of deviation from the principles and give reasons for these deviations and any alternative practice(s) adopted.

Please read the instructions below carefully before completing this form:

• i. Every line item and indicator must be completed.

• ii. Respond to each question with "Yes" where you have applied the principle, and "No" where you are yet to apply the principle.

• iii. An explanation on how you are applying the principle, or otherwise should be included as part of your response.

• iv. Not Applicable (N/A) is not a valid response.

Section B - General Information

Section C - Details of Board of the Company and Attendance at Meetings

1. Board Details:

2. Attendance at Board and Committee Meetings:

Section D - Details of Senior Management of the Company

1. Senior Management:

Section E - Application

Principles

Reporting QuestionsPart A - Board of Directors and Officers of the BoardPrinciple 1: Role of the Board

"A successful Company headed by an effective Board which is responsible for providing entrepreneurial and strategic leadership as well as promoting ethical culture and responsible corporate citizenship. As a link between stakeholders and the Company, the

Board is to exercise oversight and control to ensure that management acts in the best interest of the shareholders and other stakeholders while sustaining the prosperity of the Company"

is

Principle 2: Board Structure and Composition

"The effective discharge of the responsibilities of the Board and its committees is assured by an appropriate balance of skills and diversity (including experience and gender) without compromising competence, independence and integrity "

Principle 3: Chairman

"The Chairman is responsible for providing overallleadership of the Company and the Board, and eliciting the constructive participation of all Directors to facilitate effective direction of theBoard"

i) Does the Board have an approved Charter which sets out its responsibilities and terms of reference? Yes/No

If yes, when was it last reviewed?

Yes. The Board has an approved Charter which sets out its responsibilities and terms of reference.

It was last reviewed on July 22 2022

• i) What are the qualifications and experiences of the directors?

• ii) Does the company have a Board-approved diversity policy? Yes/No

  If yes, to what extent have the diversity targets been achieved?

iii) Are there directors holding concurrent directorships? Yes/No

If yes, state names of the directors and the companies?

iv)Is the MD/CEO or an Executive Director a chair of any Board Committee? Yes/No

If yes, provide the names of the Committees.

i) Is the Chairman a member or chair of any of the Board Committees? Yes/no

If yes, list them.

ii)At which Committee meeting(s) was the Chairman in attendance during the period under review ?

iii) Is the Chairman an INED or a NED?

Please find attached the profile of the directors stating their qualifications and experience

Yes.

The set diversity targets have been largely achieved as seen in the diversity on the Board. A close look at the members of the Board also shows a variety of backgrounds with directors of different religions, tribes and experience resulting in a well-diversified board.

Yes.

1. Mr. Ladi Balogun

• i. FCMB Pensions Limited

• ii. Credit Direct Finance Company Limited

• iii. FCMB Asset Management v. FCMB Capital Markets Limited

2. Prof. Oluwatoyin Ashiru i. CSL Stockbrokers Limited

The Chairman did not attend any Committee meeting during the period under review.

Principles

Reporting Questions

Explanation on application or deviation

"The ManagingDirector/Chief Executive ii)

Officer is the head of management delegated by the Board to run the affairs of

the Company to achieve its strategic objectives for sustainable corporateperformance"

Does the MD/CEO have a contract of employment which sets out his authority and relationship with the Board? Yes/No If no, in which documents is it specified?

Yes, the MD/CEO has a contract of employment which sets out his authority and relationship with the Board

Does the MD/CEO declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No

Yes, the MD/CEO declares any conflict of interest annually, thereafter, and as they occur.

iii)Which of the Board Committee meetings did the MD/CEO attend during the period under review?

None.

iv)Is the MD/CEO serving as NED in any other company? Yes/no.

If yes, please state the company(ies)?

Yes, the MD/CEO serves as a Non-Executive Director in other companies.

i. ii.

FCMB Asset Management Limited Credit Direct Finance Company Limited

• iii. FCMB Pensions Limited

• iv. FCMB Capital Markets Limited

v)Is the membership of the MD/CEO in these companies in line with the Board-approved policies? Yes/No

Yes, the membership of the MD/CEO in these companies is in line with the Board approved policiesPrinciple 5:

Executive Directors

i)Do the EDs employment?

havecontractsof

Yes, the Executive Directors have contracts of employment.

Yes/no

Executive Directors supportthe Managing Director/ChiefmanagementCompanyExecutive operationsOfficerofinthe and the

ii)If yes, do the contracts of employment set out the roles and responsibilities of the EDs? Yes/No

If no, in which document are the roles and responsibilities specified?

Yes. The Executive Directors' (EDs) contracts of employment stipulate their roles and responsibilities.

iii)Do the EDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No

Yes, the Executive Directors (EDs) declare conflict of interest on appointment, annually and as the need arises

iv)Are there EDs serving as NEDs in any other company? Yes/No

If yes, please list

No, there are no EDs serving as NEDs in any other company

v)Are their memberships in these companies in line with Board-approved policy? Yes/No

Yes. However, none of the EDs are currently serving on the Board of other companies.

Principle 6:

Non-Executive Directors

i)Are the roles and responsibilities of the NEDs clearly defined and documented? Yes/No If yes, where are these documented?

Yes, the roles of the NEDs are clearly defined and documented in the company's Corporate Governance Manual.

Non-Executive Directors bringto bear their knowledge, expertise and independent

ii)Do the NEDs have letters of appointment specifying their duties, liabilities and terms of engagement? Yes/No

Yes, the NEDs have letters of engagement specifying their duties, liabilities, and terms of engagement.

judgment on issues of strategy and performance on the Board

Principle 7: Independent Non-Executive Directors

iii)Do the NEDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No

Yes, the NEDs declare any conflict of interest on appointment, annually and as the need arises.

iv)

Are NEDs provided with information relating to the management of the company and on all Board matters?

Yes/No

If yes, when is the information provided to the NEDs

Yes, NEDs are provided with information relating to the management of the company on all Board matters.

The information is provided from time to time, on demand and at least every quarter

v)What is the process ofensuringcompleteness and adequacy of the information provided?

vi)Do NEDs have unfettered access to the EDs, Company Secretary and the Internal Auditor? Yes/No

i)Do the INEDs meet the independence criteria prescribed under Section 7.2 of the Code? Yes/No

The completeness and adequacy of the information provided is verified from source and direct engagements with Divisional Heads.

Yes, the Non-Executive Directors have unfettered access to the EDs, Company Secretary and Internal Auditors.

Yes, the independent director meets the criteria prescribed under section 7.2 of the code

Independent Non -Executive

Directors bring a high degreeof objectivity to the Board for sustaining andstackoenhfiodldenecr etru" st

Reporting Questions

ii)Are there any exceptions?

iii)What is the process of selecting INEDs?

The process of selecting an Independent Non-Executive Director is as follows:

• • A careful analysis of the existing Boards strengths and weaknesses, skills, experience gaps and diversity considering the company's current business priorities and future plans;

• • Identification, shortlisting and interviewing of candidates with the appropriate expertise and experience.

• • Conducting formal and Informal background checks to ensure they are fit and proper persons to sit on the Board of the Company.

• • Discussing formally with prospective candidates concerning the Board's expectation and the nominee's ability to make the necessary commitment.

• • The appointment process shall be communicated to Board members and filed by the Company Secretary.

• • External consultants may be engaged as appropriate to obtain an independent view and input into the appointment process.

• • Once the nomination is approved by the Board, the company secretary notifies CBN in writing, seeking the CBN's approval to the appointment.

• • Upon approval by the CBN, the appointment and approval shall be communicated to the new Director in writing.

• iv) Do the INEDs have letters of appointment specifying their duties, liabilities and terms of engagement? Yes/No

• v) Do the INEDs declare any conflict of interest on appointment, annually, thereafter and as they occur? Yes/No

• vi) Does the Board ascertain and confirm the independence of the INEDs? Yes/No If yes, how often?

  What is the process?

• vii) Is the INED a Shareholder of the Company?

  Yes/No

  If yes, what is the percentage shareholding?

• viii) Does the INED have another relationship with the Company apart from directorship and/or shareholding? Yes/No If yes, provide details.

What are the components of INEDs remuneration?

Yes, the INEDs have letters of appointment specifying their duties, liabilities, and terms of engagement.

Yes, the INEDs declare any conflict of interest on appointment, annually, thereafter, and as they occur.

Yes.

The Board ascertains and confirms the independence of the INEDS at appointment and annually through the annual declaration process. The company has generic forms which INEDS are required to fill on appointment and annually thereafter. These forms contain questions on the shareholding of the INED and any information conflict of interest

Principle 8: Secretary

Company i) Is the Company Secretary in-house or outsourced?

"The

Company Secretary ii) What is the qualification and experience of the

support theeffectiveness ofthe Board by assisting the

Company Secretary?

The Company Secretary is in-house.

The Company Secretary is a lawyer and a Member of the Nigerian Bar Association with over 28 years' experience in legal practice

Board and management todevelop goodcorporategovernance practices and culture within the Company"

• iii) Where the Company Secretary is an employee of the Company, is the person a member of senior management?

  Yes. The Company Secretary is a member of the Senior Management team of the Company.

• iv) Who does the Company Secretary report to? The Company Secretary reports functionally to the Board and administratively to the MD/CEO

• v) What is the appointment and removal processThe criteria for considering the appointment of the

of the Company Secretary?

vi)Who undertakes and approves the performance appraisal of the Company Secretary?

Company Secretary includes:

• • A careful due diligence exercise is carried out on the candidate.

• • The candidate must have the appropriate expertise and experience in addition to being fit and proper persons;

• • The candidate must have the ability to make the necessary commitment; and

• • The candidate must be approved by the board of directors.

The removal process is carried out by the Board.

The performance appraisal of the Company Secretary is carried out by the MD/CEO and approved by the Board.

Principles

Reporting Questions

Explanation on application or deviation

strategic objectives of the Company"

Principle 11:

Board Committees

"To ensure efficiency and effectiveness, the Board

i) Do the Board Committees have Board approved Charters which set out their responsibilities and terms of reference?

Yes/No

delegates some of its ii) What is the process for reviewing and approving minutes of Board Committee of meetings?

functions, duties and responsibilities to wellstructured committees, without abdicating its responsibilities"

• iii) What are the timelines for sending the minutes to the directors?

• iv) Who acts as Secretary to board committees?

v) What Board Committees are responsible for the following matters?

• a) Nomination and Governance

• b) Remuneration

• c) Audit

• d) Risk Management

The process of reviewing and approving the minutes of Board Committee is as follows;

• • The draft minutes are prepared and sent to the Chairman for review.

• • The inputs and corrections noted are sent to Members for review.

• • The minutes are finalized and presented to the Board for adoption.

• • Adopted minutes are executed.

The minutes are sent out at least three (3) days after the meeting.

The Company Secretary acts as Secretary to all Board Committee and may appoint suitable persons to act as Secretary of any of the meetings.

• a) The Board Governance and Remuneration Committee

• b) The Board Governance and Remuneration Committee

• c) The Board Risk, Audit and Finance Committee

• d) The Board Risk, Audit and Finance Committee

The Members of the Board Audit Committee have rience which cut across finance, business and

Principles

Reporting Questions

Explanation on application or deviation

• xviii) How often does the Committee responsible for Audit review the internal auditor's reports?

• xix) Does the Company have a Board approved internal control framework in place?

  Yes/No

• xx) How does the Board monitor compliance with the internal control framework?

The Committee reviews the Internal Auditor's report on a quarterly basis

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Fcmb Group plc published this content on 01 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2024 16:43:11 UTC.