Re: duplication of corporate governance codes and the dilemma of firms with dual regulatory jurisdictions

• Published date: 06 June 2016
• Date: 06 June 2016
• DOI: https://doi.org/10.1108/CG-08-2015-0115
• Pages: 476-489
• Author: Lawal Bello
• Subject Matter: Strategy,Corporate governance

Re: duplication of corporate governance

codes and the dilemma of firms with dual

regulatory jurisdictions

Lawal Bello

Lawal Bello holds a PhD

in Risk Management from

Glasgow School of

Business & Society,

Glasgow Caledonian

University, Glasgow, UK.

Abstract

Purpose –This paper aims to examine the evolution of corporate governance in Nigeria and how the

duplication of code of corporate best practices is impacting compliance with the key recommendations

of these guidelines. The issues of corporate governance and reforms especially those related to the

development and implementation of code of corporate best practices have been a subject of academic

discuss over the years with more research emphasis placed on developed economies. This paper

intends to add the sub-Sahara Africa and the emerging economic perspective to this vibrant stream of

research.

Design/methodology/approach –This paper adopts an explanatory approach in the review of the four

different codes of corporate governance that were issued in Nigeria in the past ten years.

Findings –The paper demonstrated that corporate governance has been a fundamental issue of

concern in Nigerian public enterprises since the country gained independence in 1960. The paper

equally established that the application of recent corporate governance reforms has been challenged,

not on competency grounds but rather by the proliferation of codes which have created implementation

and monitoring difficulties for both the affected firms and the regulatory agencies.

Originality/value –Unlike other previous studies, this paper offers comprehensive analysis of

corporate governance evolution in Nigeria and found through documented literatures that shortage of

experienced local personnel and the absence of effective external control mechanisms have been the

bane against the development of corporate governance in Nigeria. The originality of this paper also lies

in being the first paper to have linked developments in the public enterprises to the renewed focus on

corporate governance. This is the most inclusive paper to have identified key implications of multiplicity

of corporate governance codes and the direct application of governance system within the context of

the country’s socio-cultural distinctiveness.

Keywords Codes, Corporate governance, Boards of directors, Corporate ownership

Paper type General review

Introduction

The concept of corporate governance was popularised by the spates of corporate

scandals which have continued to shock institutions across the globe (Rose, 2005;

Shivdasani and Zenner, 2002;Kakabadse et al., 2001). Globally respected and

well-established companies were found to have been involved in different kinds of

unethical business practices including profit falsification, excessive secrecy, debt

concealment, naked short selling, money laundering and the manipulation of financial

statement through creative accounting practices, amongst others (Solomon, 2007;Clarke,

2007;Cadbury, 2000). These unprofessional behaviours by the corporate managers led to

series of high-profile corporate failures and bankruptcies, notably in developed and

emerging economies. The spectacular collapses of large companies such as the Bank of

Credit and Commerce International (BCCI) in 1991, Enron in 2001, Rank Xerox, WorldCom,

Qwest and Tyco in 2002 and Lehman Brothers, a 158-year-old investment bank, in 2008,

the Merrill Lynch takeover and the move by Goldman Sachs and Morgan Stanley to seek

Received 25 August 2015

Revised 23 February 2016

Accepted 1 March 2016

The author would like to

acknowledge the tremendous

effort of Professor Zeljko

Sevic, the former Dean of

Caledonian Business School,

Glasgow Caledonian

University, Scotland for his

useful comments and

suggestions. He would also

like to express profound

gratitude to Professor Jian

Chen of the Faculty of Social

Sciences, the University of

Nottingham, United Kingdom,

for offering constructive

suggestions and

improvements to the final

draft.

PAGE 476 CORPORATE GOVERNANCE VOL. 16 NO. 3 2016, pp. 476-489, © Emerald Group Publishing Limited, ISSN 1472-0701 DOI 10.1108/CG-08-2015-0115