Evaluation of Corporate Governance Practices in Emerging Markets (A case study of Nigerian Banking Industry)

Document Type : Original Article


1 The University of Salford

2 The University of Sistan and Baluchestan


This study explores corporate governance practices within the context of the Nigerian banking industry using instances of corporate governance lapses that resulted in part to the Nigerian banking crises. We present multiple case analysis of publicly available documents and court papers (in the United Kingdom and Nigeria) to document instances of breach and areas of weakness in the existing Nigerian code of corporate governance. We supported these with data obtained from multiple sources (using semi-structured interviews, observation and further documentary analysis) to explain and yield insight to the motivation behind these corporate governance practices. The research’s  theoretical framework adopts theoretical triangulation and is designed to extend the present application of institutional theories and legitimacy theories to include roles of external and internal institutions, power blocks, and the role of legitimacy seeking acts in influencing corporate governance practices. From the case analysis, we suggest multiple actors and influences exist to shape the corporate governance practices within most commercial banks. These lapses make it possible for dominant actors within the organisation to exhibit symbolic compliance while taking advantage of these lapses to shareholders detriment.


Adegbite, E. (2011). A review of the revised code of corporate governance in Nigeria. BusinessDay.
Adegbite, E. (2012). Corporate governance regulation in Nigeria. Corporate Governance: An International Review, 12(2), 257-276.
Adegbite, E., & Nakajima, C. (2010). Institutional determinants of good corporate governance: The case of Nigeria Firm level of internationalisation regionalism and globalisation. Basingstoke: Palgrave Macmillan.
Adegbite, E., & Amaeshi E, A. (2010). Multiple influences on corporate governance in Sub-Saharan Africa: actor’s strategies & Implications. Paper presented at the Centre for the study of globalisation & regionalisation.
Adekoya, A. A. (2010). Corporate Governance reforms in Nigeria: Challenges and Suggested Solutions. Journal of Business Systems, Governance and Ethics, 6(1), 38-50.
Aguilera, R. and Cuervo-Cazurra, A. (2004). Codes of good governance worldwide: what is the trigger? Organisation Studies 25(3), 420.
Aguilera, R. V., Filatotchev, I., Gospel, H., & Jackson, G. (2008). Costs contingencies and complementarities in corporate governance models. Organisational Science, 19(3), 475-494.
Ahunwa, B. (2002). Corporate governance in Nigeria. Journal of Business Ethics, 37, 267-287.
Ajogwu, F. (2007). Corporate Governance in Nigeria: Law and Practice. Lagos Nigeria.
Anderson, P. F. (1983). Marketing, Scientific Progress Journal of Marketing, fall, 18-31.
Armstrong, C., Guay, W. R., Mehran, H., & Weber, J. (2015). The role of information and financial reporting in corporate governance: A review of the evidence and the implications for banking firms and the financial services industry. Economic Policy Review, Forthcoming.
Arun, T. G., & Turner, J. (Eds.). (2009). corporate governance of banks in developing economies: concepts and issues. Cheltenham: Edward Elgar Publishing, Inc.
Becht, M., Bolton, P., & Roell, A. (2002). Corporate Governance and Control. National Bureau of Economic Research.
Berger, A. N., Imbierowicz, B., & Rauch, C. (2016). The roles of corporate governance in bank failures during the recent financial crisis. Journal of Money, Credit and Banking, 48(4), 729-770.
Blaikie, N. (1993). Approaches to social enquiry Cambridge the Polity Press.
Blanchard, O. (2009). The crises: basic mechanisms and appropriate policies. International Monetary Fund.
Bryman, A. (2001). Social Research Methods. Oxford: Oxford University Press.
Bryman, E.,A., and Bell (2007). Business Research Methods. Oxford: Oxford University Press.
Cadbury, A. (1992). The Financial Aspects of Corporate Governance; A report of the committee on Corporate Governance. London.
Caprio, G., & Levine, R. (2002). Corporate Governance in Finance: Concepts and International Observations. Paper presented at the Building the Pillars of Financial Institutions Governance: The role of Public and Private Sector Institutions.
Caprio, G., & Levine, R. (2004). Bank Valuation and Governance World Bank.
CBN. (1995). Central Bank of Nigeria Annual Report.
CBN. (1998). Central Bank of Nigeria Annual Report.
CBN. (2000). Central Bank of Nigeria Annual Report.
CBN. (2009). Central Bank of Nigeria Annual Report.
CBN. (2011). Central Bank of Nigeria Annual Report.
CBN. (2013). Central Bank of Nigeria Annual Report.
CBN. (2014). Central Bank of Nigeria Annual Report.
CBN. (2015). Central Bank of Nigeria Annual Report.
Charreaux, G. (2004). Corporate Governance theories: From micro theories to national systems theories.
Charreaux, G. (2004). Corporate Governance theories: From micro theories to national systems theories.
Christopher, J. (2010). Corporate Governance-A multi-theoretical approach to recognizing the wider influencing forces impacting on organizations. Critical Perspectives in Accounting, 21(2010), 683-695.
Christopher, J. (2010). Corporate Governance-A multi-theoretical approach to recognizing the wider influencing forces impacting on organizations. Critical Perspectives in Accounting, 21(2010), 683-695.
Claessens, S., & Yurtoglu, B. (2012). Corporate governance in emerging markets: A survey. Emerging markets review, 2012, 1-33.
Claessens, S., Djankov, S., Lang, L., & (2000). The separation of ownership and control in East Asian Corporations. Journal of Financial Economics. 58, 81-112.
Clarke, T. (2004). Theories of Corporate Governance, the philosophical foundations of Corporate Governance. London and New York: Rout ledge.
Clarke, T. (2005). Accounting for Enron: shareholder value and stakeholder interests. Corporate Governance: An International Review, 13(5), 598-612.
Clarkson, M. (2005). A stakeholder framework for analysing and evaluating corporate social performance. Academy of Management Review, 20(1), 92-118.
Cole, Rebel A., and Lawrence J. White. (2012) Déjà Vu All Over Again: The Causes of US Commercial Bank Failures This Time Around. Journal of Financial Services Research, 42, 5–29.
Cooper, D. R., and Schindler, P. S. (2001). Business Research Method New York: McGraw-Hill.
Cuomo, F., Mallin, C., & Zattoni, A. (2015). Corporate Governance Codes: A Review and Research Agenda. Corporate Governance: An International Review.
Deegan, C. (2002). Introducing the legitimising effect of social and environmental disclosures - a theoretical foundation. Accounting, Auditing and Accountability Journal, 15(3), 282-311.
Deegan, C., & Blomquist, C. (2006). Stakeholder influence on corporate reporting: An exploration of the Interaction between WWF- Australia and the Australia mining industry. Accounting Organisations and Society, 31(4-5), 343-372.
Deegan, C., & Unerman, J. (2011). Financial Accounting Theory (Second European Edition Ed.). London: McGraw-Hill Companies.
Denis, K., & McConnell, J. J. (2003). International Corporate Governance Journal of Quantitative Analysis, 38(1), 1-36.
Denzin, N. K., and Lincoln, Y. S. (1994). Handbook of Qualitative Research. Thousand Oaks CA: Sage.
DeYoung, Robert, and Gokhan Torna. (2013) Nontraditional Banking Activities and Bank Failures during the Financial Crisis. Journal of Financial Intermediation, 22, 397–421.
DiMaggio P J & Powell W (1983), The iron cage revisited institutional isomorphism and collective rationality in organizational fields, American Sociological Review, 48, 147-60.
Easterby-Smith, M., Thorpe, R., & Jackson, P. R. (2012). Management research. Sage.
Emerson, W. M., Helena, A., & Raposo, M. (2011). Stakeholder theory: issues to resolve. Management Decision, 49(2), 226-252.
Eriksson, P., & Kovalainen, A. (2008). Qualitative Methods in Business Research. London: Sage Publications Limited.
Essen, M., Engelen, P. J., & Carney, M. (2013). Does “Good” Corporate Governance Help in a Crisis? The Impact of Country‐and Firm‐Level Governance Mechanisms in the European Financial Crisis. Corporate Governance: An International Review, 21(3), 201-224.
FGN. (1991). Banks and Other Financial Institutions Act.
Friedman, A. L., & Miles, S. (2006). Stakeholders: Theory and Practice. Oxford: Oxford University Press.
Gasper, D. (1999, Jan-Feb). Problems in the logical framework approach and challenges for project cycle management. The Courier, 75-77.
Gibson, M. S. (2000). Is corporate governance ineffective in emerging markets? Federal Reserve Bank.
Gill, J., and Johnson, P. (1991). Research Methods for Managers. London: Paul Chapman Publishing.
Gnan, L., & Montemerlo, D. (2002). Structure and dynamics of ownership and governance and strategy: role of family and impact on performance in Italian SMEs. In G. Corbetta & D. Montemerlo (Eds.), The role of family in family business.
Gourevitch, P. A., & Shinn, J. (2007). Political power & corporate control: the new global politics of corporate governance Oxford: Princeton University Press.
Governance: An International Review, 15 (2):173-193
Greenspan, A. (2010), The Crisis, Brookings Papers on Economic Activity, Brookings Institution,
Haan, J., & Vlahu, R. (2016). Corporate governance of banks: A survey. Journal of Economic Surveys, 30(2), 228-277.
Hair, J. F., Celsi, M. W., Money, A. H., Samouel, P., and Page, M. J. (2011). Essentials of Business Research Methods (2 Ed.). London: M.E. Sharpe.
Hallenbone, E., and Priest, J. (2009). Business and Management Research: Paradigms and Practices. Basingstoke: Palgrave Macmillan.
Hawkins, J., & Turner, P. (2000). International Financial Reform: Regulatory and Other Issues: Bank of International Settlements.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm. Journal of Financial Economics, 3(4), 305-360.
Karanikolos, M., Mladovsky, P., Cylus, J., Thomson, S., Basu, S., Stuckler, D., ... & McKee, M. (2013). Financial crisis, austerity, and health in Europe. The Lancet, 381(9874), 1323-1331.
Key, S. (1999). Toward a new theory of the firm: a critique of stakeholder "theory". Management Decision, 37(4), 317-328.
Lang, W. W., & Jagtiani, J. A. (2010). The mortgage and financial crises: The role of credit risk management and corporate governance. Atlantic Economic Journal, 38(2), 295-316.
Larrinaga-Gonzalez, C. (Ed.). (2007). Sustainability reporting: Insight from neo-institutional theory. Abingdon: Rout ledge.
Lépineux, F. (2005) Stakeholder theory, society and social cohesion, corporate governance, Vol. 5(2), 99 – 110
Liu, C., Uchida, K., & Yang, Y. (2012). Corporate governance and firm value during the global financial crisis: Evidence from China. International Review of Financial Analysis, 21, 70-80.
Luo, Y. (2005). Corporate governance and accountability in multinational enterprises: concepts and agenda. Journal of International Management, 11, 1-18.
Macey, J. R., & O'Hara, M. (2016). Bank corporate governance: a proposal for the post-crisis world. Economic Policy Review, Issue Aug, 85-105.
Marnet, O. (2007). History repeats itself: the failure of rational choice models in corporate governance. Critical Perspectives in Accounting, 18(191-210).
McNulty, T., Zattoni, A., & Douglas, T. (2013). Developing corporate governance research through qualitative methods: A review of previous studies. Corporate Governance: An International Review, 21(2), 183-198.
Mensah, S. (2002). Corporate governance in Ghana: Issues and Challenges. Paper presented at the African Capital Markets Conference.
Mensah, S. K. (2004). Corporate governance and corruption in Ghana. Accra Ghana: IDRC.
Mitton, T. (2002). A Cross -Firm analysis of impact of corporate governance  on the east Asian financial crises. Journal of Financial Economics.
Morck, R., Wolfenzon, D., & Yeung, B. (2005). Corporate Governance, Entrenchment and Growth. Journal of Economic Literature, XLIII (September), 655-720.
NDIC. (2008). NDIC Annual report.
NDIC. (2010). NDIC Annual report.
NDIC. (2014). NDIC Annual report.
Neuman, W. L. (2011). Basics of Social Research; Qualitative and Quantitative Approaches (International Edition Ed.). London: Pearson.
Ng, J., and  Roychowdhury, S., (2014) Do loan loss reserves behave like capital? Evidence from recent bank failures. Review of Accounting Studies, 19, 1234–79.
NSE. (2007). NSE Annual Report.
NSE. (2009). NSE Annual Report.
NSE. (2011). NSE Annual Report.
Ntim, C. G., Lindop, S., & Thomas, D. A. (2013). Corporate governance and risk reporting in South Africa: A study of corporate risk disclosures in the pre-and post-2007/2008 global financial crisis periods. International Review of Financial Analysis, 30, 363-383.
O'Donovan, G. (2002). Environmental disclosures in the annual reports: Extending the applicability and predictive power of legitimacy theory. Accounting, Auditing and Accountability Journal, 15(3), 343.
OECD. (1998). Corporate Governance Improving Competitiveness an Access to Capital in Global markets: Organisation of Economic Corporation and Development.
Okezie, A. M., Sheriffdeen, T., & Akingunola, R. (2011). Relationship between regulation and performance of Nigerian commercial banks. European Journal of Economics, Finance and Administrative Sciences (33), 214-221.
Okike, E.N.M. (2007) Corporate governance in Nigeria: The status quo’ Corporate
Okike, N. M. E. (2002). Influences on the corporate governance framework and reporting on listed companies in a developing country: A Nigeria case study. Paper presented at the 3rd international Conference for the British Accounting Association special interest group in corporate governance
Olowookere, E. (2009). IFRS and Accounting issues: Imperatives of Attainment of Economic Development of Nigeria. Paper presented at the Institute of Chartered Accountants of Nigeria 39th annual Accountants Conference.
Orlikowski, W. J., and Baroudi, J. (1991). Studying Information Technology in Organisations Research Approaches and Assumptions. Information Systems Research, 2, 1-28.
Otusanya, O. J. (2011). The Role of Professionals in Anti-Social Financial practices: The case of Nigeria. Accountancy Business and the Public Interest, 2011, 42-93.
Oyejide, T. A., & Soyibo, A. (2001). Corporate governance in Nigeria. Paper presented at the conference on corporate governance
Peel, M. (2006). Nigeria Related Financial Crimes and its Links with Britain; an African Programme Report: Chatham House the Royal Institute of International Affairs.
Phan, P.H., & Yoshikawa, T. (2000) Agency theory and Japanese corporate governance. Asia Pacific Journal of Management, Vol.17, No. 1, 1-27.
Porta, R. L., Lopez-de-Silanes, F., Shleifer, A., and Vishny, R. W. (1998). Law and Finance. Journal of Political Economy, 106(6), 1133-1155.
Qu, W., & Leung, P. (2006). Cultural impact on Chinese corporate disclosure: A corporate governance perspective. Managerial Auditing Journal, 21(3), 241- 264.
Rabelo, F., & Vasconcelos, F. (2002). Corporate Governance in Brazil. Journal of Business Ethics, 37(3), 321-335.
Remenyi, D., Williams, B., Money, A., and Swartz, E. (1998). Doing Research in Business and Management; An introduction to Process and Method. London: Sage.
Report on the Observance of Standards and Codes (ROSC) Nigeria. (2004). The World Bank Group.
Saunders, M., Lewis, P., and Thornhill, A. (2009). Research Methods for Business students. Harlow, Essex: Prentice Hall.
Shleifer, A., Vishny, R., 1997. A survey of corporate governance. Journal of Finance, 52, 737-783.
Solomon, A., & Solomon, J. (2002). Empirical evidence of long termism and shareholder activism in UK unit trusts. Corporate Governance: An International Review, 7(3), 288-308.
Solomon, J. (2007). Corporate Governance & Accountability (Vol. 2nd Edition): John Wiley & son’s ltd.
Solomon, J. (2010). Corporate Governance and Accountability (Third Ed.). Sussex United Kingdom.
Solomon, J. F., & Solomon, A. (2006). Private social, ethical and environmental disclosure. Accounting, Auditing and Accountability Journal, 19(4), 564-591.
Solomon, J. F., Solomon, A., & Park, C. (2002). A conceptual framework for corporate governance reform in South Korea: some empirical evidence. Corporate Governance: An International Review, 10(3), 211-224.
Soludo, C. (2006). Potential impacts of the new global financial architecture on poor countries.
Soludo, C. (2009). Global financial and economic crises: How vulnerable is Nigeria.
Spong, K. R., & Sullivan, R. J. (2007). Corporate governance and bank performance: Federal Reserve Bank of Kansas.
Strauss, A., and Corbin, J. (Eds.). (1998). Basics of Qualitative Research: Grounded Theory procedures and techniques (2nd edition Ed.). Newbury Park.
Strauss, L., and Cobin, J. (1998). Basics of Qualitative Research: Techniques and Procedures for developing Grounded Theory. London Sage.
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571- 610.
Tricker, B. (2009). Corporate Governance. Oxford: Oxford University Press.
Tricker, B. (2015). Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Washington press, DC (in press).
Wilson, J. (2010). Essentials of Business Research; A guide to doing your Research Project London: Sage Publications.
Wolfe, R. A., & Putler, D. (2002). How tight are the ties that bind stakeholder groups? Organisation Science, 13, 64-80.
Yahaya, M. I. (1998). Corporate governance in Nigeria: Private sector perspective. Paper presented at the Paper presented at the annual Institute of Chartered Accountants of Nigeria annual conference.
Yakassai, A. G. A. (2001). Corporate governance in a third world country with reference to Nigeria. Corporate Governance: An International Review, 9(3), 238-253.
Yin, K. (2003). Application of case study research design and methods. Thousand Oaks: Sage.
Yin, R. K. (2014) Case Study Research; Design and Methods. London: Sage.
Zattoni, A., & Cuomo, F. (2008). Why adopt codes of good governance? A comparism of institutional and efficiency perspectives. Corporate Governance: An International Review, 16(1), 1-15.