Enhanced Disclosure & Governance Obligations for Listed Companies in Nigeria

Introduction

In the last decade, Nigeria’s corporate and capital markets framework has undergone a profound transformation. The passage of the Investments and Securities Act, 2025 (ISA 2025), together with the existing Companies and Allied Matters Act, 2020 (CAMA), the Financial Reporting Council of Nigeria Act (FRCN Act) as amended, and the Nigerian Code of Corporate Governance 2018 (NCCG), has created a new landscape of accountability for listed companies and their boards. These laws and codes are reinforced by the Nigerian Exchange (NGX) Rulebook, which sets day-to-day obligations for disclosure and transparency.

At the heart of this framework is a clear policy goal: to enhance investor protection, strengthen market integrity, and align Nigeria with international standards of corporate governance and disclosure. The reforms close long-standing gaps in ownership transparency, tighten liability for directors and issuers, modernise the takeover regime, and introduce statutory mandates for sustainability reporting.

For boards and management of listed companies, this new regime means more than compliance box-ticking and the effect is a dual accountability structure: listed companies are simultaneously regulated as corporate entities under CAMA/FRCN Act/NCCG, and as market participants under the ISA and both the SEC and NGX rules. Together, these obligations redefine what it means to be a public company in Nigeria and make clear that transparency, integrity, and governance are now matters of survival and competitive positioning.

This article examines the contours of these enhanced disclosure and governance obligations, analysing the statutory underpinnings, regulatory trends, and practical implications for boards and public companies. It considers how directors should prepare for the heightened liability landscape, what internal protocols companies need for M&A readiness, how sustainability reporting is becoming inevitable, and why governance is increasingly a source of competitive advantage rather than a mere compliance burden.

The New Disclosure Landscape

Financial and Non-Financial Reporting

Public companies must file quarterly and annual financial statements and promptly disclose material events. Under ISA 2025, issuers and directors face liability for false or misleading disclosures. The NGX Rulebook (Ch.17) requires real-time disclosure of price-sensitive information.

Ownership Transparency and Related Party Transactions

Ownership disclosure obligations are anchored in CAMA 2020, which introduced the Persons with Significant Control (PSC) regime. Companies must record PSCs (≥5%) and file this information with CAC, as reinforced by the PSC Regulations 2022. In parallel, the NGX Rulebook requires issuers to notify NGX when beneficial ownership crosses the 5% threshold. Related‑party transactions (RPTs) must be disclosed and reviewed independently. Under NCCG 2018, the Audit Committee is required to develop a related‑party transactions policy, monitor its implementation, and ensure periodic reviews. This embeds transparency and oversight in RPTs and strengthens investor confidence.

Strengthening Corporate Governance

Board Composition and Oversight

The NCCG emphasises balanced boards, independence, diversity and effective committees. The FRCN Act establishes the Directorate of Corporate Governance and empowers the Council to issue the NCCG, giving it statutory force. Boards must embed these governance standards in their practices, especially audit, nomination and risk oversight.

Directors’ Liability

ISA 2025 imposes personal liability for disclosure failures. It address misstatements in prospectuses, and cover false market statements and fraudulent inducement. Enforcement tools include criminal prosecution, offences by companies, and administrative penalties.

Takeovers and Early Disclosure

Part XII of ISA 2025 strengthens takeover rules. Section 144 requires acquirers to obtain SEC authority to proceed before making a takeover bid. This ensures transparency at the intention stage, protecting minority shareholders.

Market Integrity and Insider Trading

Insider trading is prohibited and the NGX Rulebook obliges issuers to disclose insider dealings, maintain insider lists, and adopt securities trading policies.

Practical Challenges

Despite the progressive framework established by ISA 2025, CAMA, the FRCN Act and the NGX Rulebook, the reality for many listed companies is that compliance is far from straightforward. The most immediate obstacle is the cost and capacity required to implement the reforms. Smaller and mid-tier issuers, in particular, find it difficult to justify the expense of building compliance units, hiring governance officers, or retaining external advisers. Establishing robust reporting systems for continuous disclosure, beneficial ownership monitoring, and ESG metrics demands investment in technology and training that many companies struggle to afford.

Even where resources are available, the quality and availability of data pose significant difficulties. ESG reporting requires companies to collect non-financial information such as carbon emissions, workplace diversity, and supply-chain sustainability. Few issuers have the internal systems to gather this information reliably, which leaves them vulnerable to inconsistent or incomplete reporting and, in some cases, accusations of greenwashing.

Overlaying this challenge is the problem of regulatory overlap. Listed companies must satisfy parallel obligations imposed by the SEC, NGX, FCCPC, CBN, NAICOM, PENCOM and, in some industries, specialised regulators such as the NUPRC. Each regulator issues its own circulars, filing deadlines and sanctions, often without coordination, producing a patchwork of obligations that generates compliance fatigue and duplication. For instance, a financial services issuer may have to prepare disclosure reports in different formats for the CBN, SEC, NGX and FRCN within the same reporting cycle.

There is also the question of board readiness and culture. Not all directors possess the expertise required to engage with issues such as sustainability reporting, digital disclosure platforms or takeover protocols. Long-tenured directors may resist the reforms, perceiving them as bureaucratic burdens, while independent directors sometimes lack the resources or access to information necessary to exercise effective oversight. This imbalance often reduces governance to a formal exercise rather than a genuine tool of accountability.

Technology presents another bottleneck. Although the NGX has digitised much of its disclosure process through the Issuers’ Portal, many companies lack integrated IT platforms capable of meeting these demands. Errors in filings or delays in uploads attract automatic penalties, creating frustration for issuers that are already resource-constrained.

Perhaps the most acute challenge is reputational. In a regime where disclosure obligations are continuous and public, even a single misstep—such as a late filing, an incomplete ESG report, or an insider-trading breach—can rapidly escalate into a market and reputational crisis. Investors, regulators and the public have little tolerance for lapses, and the consequence can be a loss of trust, a decline in share price, or even suspension of trading.

In short, while the enhanced disclosure and governance framework is well-intentioned and necessary, the ability of boards and management to implement it consistently and affordably remains uncertain. The challenge is not the clarity of the rules but the organisational, cultural and infrastructural readiness of Nigerian listed companies to live up to them.

Implications for Boards and Public Companies

1. Heightened Liability: Directors face personal civil and criminal liability under ISA 2025 for disclosure failures. They must exercise due diligence and cannot rely solely on collective board decisions.

2. Statutory Foundation for Sustainability Obligations: Section 355(1)(r)(v) mandates the SEC to issue rules on sustainability principles and practices for capital market operators and public companies. The implication of this provision is that sustainability and ESG disclosures will now shift from soft-law guidance to hard-law obligations as soon as the SEC issues binding rules. Accordingly, for boards, this means the writing is already on the wall: they must begin integrating sustainability oversight into their governance structures in anticipation of the rules, develop internal reporting systems, and prepare for external assurance on ESG metrics. Waiting until the SEC formally issues regulations would leave boards exposed and unprepared.

3. Earlier Engagement in M&A: Section 144’s requirement for SEC authority at the intention stage of takeovers have implications for acquirer or target boards alike. Unlike the old regime where disclosure and regulatory engagement often came after a deal was substantially negotiated, now boards must be ready to respond as soon as intention is signalled to SEC. Target company boards must maintain “defensive readiness”, by establishing clear internal protocols for evaluating bids, activating independent committees, and hiring advisers quickly. In the same vein, directors must act in the interest of all shareholders (including minorities), ensuring that responses to takeover approaches are transparent and not skewed towards majority owners or insiders. Finally, boards should prepare to commission independent valuations and fairness opinions early, given that the SEC review process will scrutinize fairness of consideration offered.

4. Governance as Competitive Advantage: Transparent reporting, diverse boards, and credible ESG practices strengthen investor confidence, lower cost of capital, and improve market positioning.

5. Compliance Costs: Meeting disclosure and governance obligations requires investment in compliance officers, consultants, and reporting systems. Boards must view these as strategic costs rather than avoidable expenses.

6. Market Discipline: Enhanced disclosure obligations expose companies to greater reputational risk. Effective crisis disclosure planning and proactive transparency are now essential.

Conclusion

Nigeria’s enhanced disclosure and governance framework has raised the bar for listed companies. What was once viewed as aspirational is now a binding legal and market expectation. For boards, this means heightened liability and the need for proactive oversight; for issuers, it is a reminder that credibility with investors depends on transparency and strong governance structures.

The real opportunity lies in treating these obligations not as burdens, but as strategic assets. Companies that embrace transparency and embed governance into their culture will attract investment, lower their risk profile, and strengthen resilience in an increasingly competitive market. Those that resist will find the cost of non-compliance far higher than the cost of reform.

By Dr. Sanford Mba (Partner, Dentons ACAS-Law)