The CGRS consists of three components, which is a unique setup in the world of stock exchange corporate governance indices as will be further explained below.


Existing stock exchange CG indices are mainly based on evaluation against a set of criteria, akin to the first component of the CGRS. The CG evaluation criteria used by the existing indices are in the majority derived from voluntary national CG codes, thus lending an incentive to companies for their implementation. The ISE CG Index for example is the result of an initiative by the Turkish Capital Market Board to promote the voluntary comply-or-explain Turkish Corporate Governance Principles.

In most instances, however, index criteria go beyond existing national CG criteria, since one of the principal motivations of indices is to move beyond prevailing practices. In going beyond the national code, they typically incorporate international best practice benchmarks such as the OECD’s Principles of Corporate Governance. In addition, indices may contain elements that are of importance in the context of the jurisdiction. The South African SRI index for example has indicator categories addressing Black Economic Empowerment and HIV/AIDS issues.

The CGRS Indicators

  • Component 1 – Corporate Compliance: Similar to the development of indicators in other CGI indices, the CGRS derives the indicators for the self- evaluation tool from a number of distinct sources. The sources include rules that are already binding for listed companies such as the NSE Listing rules and material needed to establish their bonafides from the Nigerian Corporate Affairs Commission. Other sources are the voluntary 2012 SEC Nigerian Corporate Governance Code, and, as a global best practice benchmark, the United Nations Global Compact reporting guidance on the 10th principle against corruption. These criteria offer an opportunity for companies to distinguish themselves since they go beyond already mandatory Listing Rules. Given the Nigerian business culture context, they appropriately focus on anti-corruption factors. These criteria are also developmental in nature, meaning that while starting at a relatively low base, they will be revised upwards with the release of new standards by SEC and other key players and be reviewed at least once every three years.
  • Component 2 – Fiduciary Awareness: The questions for the fiduciary awareness test for directors are based on the course material covering the 5 modules indicated in Table 3 above. The content of both training and test is largely derived from the same sources as the self-evaluation tool for corporate compliance. The 40 test questions during the fiduciary awareness certification are randomly drawn for a large pool of questions, so that each director will receive a different set of questions. Once certified, a director does not have to repeat the assessment. If a company changes its directors between evaluation cycles, the new directors will have to take the certification if not already certified.
  • Component 3 – Corporate Integrity: The stakeholder survey element of component 3 is based on a survey for staff and suppliers, of an evaluated company. The questions are intended to highlight elements of corporate governance that are perceptible to those stakeholders. They were developed by NSE and CBI and reviewed in partnership with the Humboldt- Viadrina School of Governance, who acted as international observers in the design and pilot phase of the CGRS.
    Both the analyst/investor and regulator facilitated interviews as well as the Expert Multi Stakeholder Group evaluation (EMSG) follow a more qualitative format than Component 1 and 2, including relevant areas that have to be covered in the deliberations.