Corporate governance in Nigeria: The status quo

It is generally believed that poor corporate governance has been the Achilles' heel of many corporations in both rich and poor nations. This is particularly true of Nigeria, where corruption is endemic. However, following the change of government in 1999, the Federal Government is keen to attract foreign investments into the country. Given the high correlation between corporate governance and investor decisions, the government is keen to position the country to take advantage of the opportunities in the global market by adhering to principles of good governance. Yet not much is known about the state of, or the current framework for, corporate governance in Nigeria. By providing a comprehensive review of the state of corporate governance in Africa's most populous country, this paper makes a contribution to the literature on the state of corporate governance in developing countries. The paper examines the mechanism for corporate governance, including the requirements of the recently established Code of Best Practices for Public Companies in Nigeria. In particular, it examines the roles of the government, the Corporate Affairs Commission, the Securities and Exchange Commission, the Nigerian Stock Exchange, the representatives of the shareholders of the companies, directors, auditors and the Audit Committee in the governance process. The paper addresses the issue of whether the governance mechanisms in Nigeria are adequate in the face of the changes and challenges in the global corporate scene. It argues that whilst there is a case for adherence to global corporate governance standards, any Code of Best Practices adopted in Nigeria must reflect its peculiar socio-political and economic environment, whilst at the same time providing the right assurance to prospective and existing shareholders.