Shareholder Primacy in Nigeria: A Myth or a Reality?

Abstract

This research is set against the backdrop of the recent occurrences bordering on corporate governance in Nigeria, such as lack of accountability to shareholders, corrupt CEO’s, inefficient boards of directors and fraud in many public companies in Nigeria. It explores shareholder primacy in Nigeria not just as a normative theory, but also as a descriptive one. Although companies claim to be run in the best interest of shareholders, there is a need to assess whether what obtains is a clear case of director primacy or shareholder primacy. Thus, the research also focuses on salient issues such as shareholder activism, shareholder rights and control and the efficiency justification. Inferences are drawn from its case studies - Cadbury Nigeria Plc and the Banking sector to determine this.

This essay is divided into six chapters. The first chapter briefly reviews the various theories of corporate governance and gives reasons why shareholder primacy has been described as the ‘ideal model’. The second chapter considers the corporate governance framework in Nigeria and sheds light on the regulatory institutions responsible for corporate governance in Nigeria. The third chapter examines the roles directors play in shareholder primacy. It reveals the legal duties of directors, the board structure in Nigeria and in the UK and the role of independent non executive directors. The fourth chapter makes a vital comparison between director primacy and shareholder primacy theories and examines some of the prevailing issues bordering around this controversy, which would be used for the analysis in chapter five. Chapter five analyses the prevailing issues in chapter four in relation to the Nigerian context. It also highlights on the lessons that can be learned from the UK with regard to these prevailing issues. It arrives at its conclusion in chapter six.