Practice and Standard of Corporate Governance in the Nigerian Banking Industry

Abstract

The main objective of this paper is to examine practice and standard of corporate governance in Nigeria using banking industry as a case-study. The consolidation of the banking industry in 2004 necessitated a review of the code of corporate governance for the Nigerian Banks. The recent Global Financial Crisis, Asia Crisis and the bitter experience of banks distress and failure, suggest that Nigeria needs to take stock of its corporate governance capacity. This paper reviews the practice of corporate governance in the banking sector of Nigeria and uses OECD Corporate Governance Assessment Instrument to analyze the standard of corporate governance in Nigeria. The analysis clearly shows a divergence between the code of corporate governance and its compliance. More importantly, for Nigeria to reap the benefits of effective corporate governance and build a sustainable public confidence in the banking industry there is need to strengthen the enforcement mechanism of the regulatory institutions. It is important to restore the confidence of the average shareholder in the capacity of the judicial system to help him enforce his rights.