The Index Governance Committee of the Nigerian Stock Exchange (NSE) has removed three companies trading their shares on the exchange from the NSE Corporate Governance Index.
The three affected companies are Diamond Bank, NEM Insurance and Continental Reinsurance and from Tuesday, January 1, 2019, they cease to be on the NSE CG Index.
A statement issued by the management of the NSE explained that Diamond Bank and NEM Insurance lost their NSE CG Index status because of corporate governance issues.
However, for Continental Reinsurance, it lost its status as a result of the firm’s application to voluntarily delist its shares from the NSE.
“The Index Governance Committee of the Exchange resolved to remove NEM Insurance from the NSE CG Index following the suspension of the CGRS rating of the company by the Steering Board of the CGRS on Monday, November 19, 2018.
“Additionally, in view of the recent governance issues with Diamond Bank, the Index Committee has decided to remove the bank from the NSE CG Index.
“The Index Committee also decided to remove Continental Reinsurance Plc from the NSE CG Index following the company’s application to The Exchange to delist from the Daily Official List of The Exchange,” the statement said.
Recall that on Thursday, February 22, 2018, during the inaugural Corporate Governance Rating System (CGRS) certification ceremony held in Lagos, launched the Corporate Governance Index of the NSE.
The NSE CG Index tracks the performance of CGRS-rated companies using their market capitalisation, free float and corporate governance rating scores.
The Index is reviewed on a bi-annual basis during which other companies that have become CGRS-rated in the interim may be added to the Index or companies that have had their ratings suspended or withdrawn may be removed.
The NSE CG Index is expected to be an important tool for investors keen on investing in well-governed companies as well as corporates eager to distinguish themselves on the ground of governance. The Corporate Governance Rating System (CGRS), launched on November 3, 2014, is a joint initiative between the NSE and the Convention on Business Integrity (CBi). It was developed to rate the corporate governance and integrity practices of all companies listed on the NSE.
