External-Internal Standards in Corporate Governance in Nigeria

Abstract:     
The paper examines the corporate governance climate in Nigeria and critically inquires into external and internal standards that guide companies in the way they are governed. The external standards considered include the statutory standards found in the relevant provisions of the Companies and Allied Matters Act, the Banks and Other Financial Institutions Act and the Insurance Act; as well as the voluntary standards set out by the Code of Best Practices on Corporate Governance in Nigeria in terms of the institutional oversight and control. The paper examined four multinational companies to identify aspects of internal standards in their governance. In this regard we found that corporate social responsibility manifesting in corporate community investments is significant. The paper is enriched by the result of a survey of companies in Nigeria on general and specific attitudes on corporate governance. In conclusion the paper identifies the voluntary nature of the Code of Best Practices and inadequate enforcement of the external standards recently adopted as the principal problem and concludes that requiring companies to demonstrate how they have complied with the Code of Best Practices will aid a positive corporate governance climate. In addition the paper posits that provision for civil actions and criminal prosecution against erring corporations for violation of statutory standards will go a long way in ensuring effective corporate governance in Nigeria.

Number of Pages in PDF File: 50

Keywords: Nigeria, corporate governance, multinational companies

JEL Classification: F23, G34, K22, K33

working papers series