CORPORATE GOVERNANCE AND ETHICS IN NIGERIA BANKING INDUSTRY: CHALLENGES AND OPPORTUNITY

Background to the Study: Financial scandals and misappropriation around the world and the recent collapse of large corporate organization in the USA and Europe have brought to the fore, again, the need for the practice of sound corporate governance, which is the system by which the affairs of companies are directed and controlled with the aim of increasing shareholders value and meeting the expectation of other stakeholders. The case of Enron in the U.S and many cases in U.K such as Polly Peck, Maxwell Communication and British Ceylon Corporate Ltd (BCL) are all becomes stressing the need for the adoption of good corporate governance in our various organizations.

In Nigeria, most especially the financial industry the retention of public confidence through the enthronement of good corporate governance and ethics remain an uncompromised duty given the role of the industry in the credit to the needy sector of the economy, the payment and settlement system and the implementation of monetary policy. It is a veritable tool for ensuring corporate survival since business confidence usually suffers each time a corporate entity collapses. Most of the business failures in the recent past are attributed to failure in corporate governance and ethical practices. For instance the collapse of bank in Nigeria in the early 1990s to date was as a result of inadequate corporate governance and ethics practices such as insider related to credit abuses and poor risk appreciation and internal control failures.

To stern the tide, this ugly trend scholars and practitioners have advocated consistently different approach and theories to corporate governance and industrial ethics. A critical tool in corporate governance be adequate disclosure on the risk profile of banks in the overall interest of the stakeholder (ICAN 2006, P. 345) defined “corporate governance as the system by which the affairs of companies are directed and controlled by those charged with the responsibility” Magdi and Nadereh (2007) view corporate governance as ensuring that the business is run well and investors receive a fair return. Oyejide and Siyibo (2001) defined corporate governance as the relationship of the enterprise to shareholders or in the wider sense as the relationship of the enterprise to society as a whole.