Insurance shareholders in Nigeria on Wednesday charged underwriting firms to adopt a successive plan in their respective companies, such that, most directors don’t have to retire at the same time on the board.
This development, they said, could negatively affect the fortune of the concerned insurers, stating that a situation whereby seven directors had to leave a board of a company at the same time, is not ideal for the growth of insurance industry.
Mr. Nonah Awo, who spoke on behalf of insurance shareholders at the 21st Annual General Meeting of Sovereign Trust Insurance Plc, in Lagos, said if insurers have had a good succession plan in place, a situation whereby several directors would be put on compulsory retirement, as contained in the National Insurance Commission(NAICOM)’s regulation, will not have arose.
Awo said, “Insurance companies must start thinking of succession plan rather than waiting for the regulator to sack everyone.”
Having this successive plan, he added, will enable the adopting companies to grow its investment, thereby, leading insurers to profitability.
If this plan is adopted, he stressed that the shareholders, who have invested so much in these companies, should be able to get a good returns on their investments.
In his part, Adebayo Adeleke, Secretary, Independent Shareholders Association of Nigeria (ISAN) appealed to NAICOM to temper justice with mercy, especially, on its policy that led to the sack of executive directors on the board of most insurance firms.
“NAICOM needs to regulate the companies with fear rather than selfish interest. You cannot sack owners of a house from their homes,” he stated.
Adeleke, while speaking with NEWSVERGE lamented about the regulations that saw seven directors of Sovereign Trust Insurance Plc out of the board.
It would be recalled that NAICOM had in 2009, released a Code of Good Corporate Governance mandating executive directors and non-executive directors, who have stayed over a stipulated period of years on the board, to exit the companies.
This directive, NEWSVERGE learnt had resulted in compulsory retirement of several board members of underwriting firms, and in most cases, six to seven executive directors retires in a swoop from each company.