13/10/2025
SME Corporate Governance
The Financial Regulatory Council of Nigeria (FRC), a regulatory agency in Nigeria, established to oversee standards around financial reporting, auditing, valuation, actuarial practice, and corporate governance, in August 2025, issued guidelines for SME Corporate Governance. This is adapted from the Nigerian Code of Corporate Governance (NCCG) 2018 and international best practices.
The SME Corporate Governance Guidelines contains 6 sections, and 11 principles. These principles, which are not prescriptive, serve as reference and framework for understanding and practicing good corporate governance.
SME, according to National Policy on SMEs issued by SMEDAN, is defined by the following characteristics:
• Micro enterprise – less than 10 employees, assets (excluding land and building), < N10m
• Small enterprise – 10 to 49 employees, assets (excluding land and building), N10m to < N100m
• Medium enterprise – 50 – 199 employees, assets (excluding land and building), N100m - < N1b
It should be noted that while there is no single right way to govern entities, there are certain universal fundamental principles which will assist all enterprises to survive and succeed. These include:
• Compliance with laws and regulations
• Building trust through effective communications with stakeholders
• Optimising capital by establishing and maintaining a sound reputation as an enterprise worth receiving investments.
• Identifying and managing business related risks.
• Adopting and developing systems, which enhance the quality of decision making.
I hope to present these principles, with relevant examples (recommended practices) in the next 3 weeks. Keep watching this page.
