Why Electronic Annual Report is necessary – SEC
The Securities and Exchange Commission, SEC has identified high cost of printing physical annual report as a major reason why shareholders should embrace electronic annual report. The SEC’s Director General, Ms Mary Uduk, while briefing newsmen in Lagos said: “Over one year ago, the SEC, spearheading the market saw the need to embrace electronic annual report distribution for three reasons.
One we discovered that the cost being spent for the printing of annual reports which in many cases gets to the investors very late, many months even after the AGM has held; so such monies would have been wasted. So we discovered that rather than waste such monies it is better to distribute these annual reports electronically.
The second advantage is that because technology is taking over the world and wherever you are in the world, once your email address is known you can receive the audited annual report electronically. And we discovered that the money that was being wasted for printing annual reports will now be distributed as part of dividends.” She further noted that the Commission gave the market to implement a pilot exercise for one year, stressing that one year ended in June, 2018.
“When it ended SEC conducted an impact assessment to see how it went. At the Capital Market Committee, CMC, meeting it was considered and it was agreed that technology is the way to go. We observed that shareholders have one or two challenges about the issue, one of that of awareness and the market has agreed that awareness on this will be intensified; two we are making greater efforts to ensure that we get the email addresses of all the shareholders. Thirdly, we have agreed in addition that there should be enlightenment campaigns.
And for those who do not have internet, which is one of the issues that the shareholders have raised, it has been agreed that physical copies will still be distributed as a mix with the electronic versions. We believe that within the next five years, technology will continue to expand and go to remote places” she emphasised. Uduk disclosed that the SEC has enjoined registrars that at every Annual General Meeting, AGM they should take a few minutes to enlighten shareholders on the benefits of electronic annual report.
While commenting on minimum operating standards in the market, she said; “As part of the Commission’s initiative to enhance the efficiency and effectiveness of the capital market operators, a number of initiatives are being taken. About two years ago the Commission introduced the Risk Based Supervision for Capital Market Operators in addition to that; we also set up a Committee to come up with a Minimum Operating Standards for capital market operators. The Committee has submitted its report and some of the recommendations include manpower and equipment, organizational structure, technology and effective processes.”