A Theoretical and Legal Perspective of Nigeria’s Corporate Governance Framework

Abstract

Nations primary company law steers the corporate governance approach in the country. To ascertain the effectiveness of regulations, regulations should be evaluated from time to time. This paper study of the effect of Nigeria’s primary and ancillary companies laws, including the main theories that give effect to the ancillary regulation, found that the custodians of the Companies and Allied Matters Act 2020, the Code of Corporate Governance for Public Companies 2011 and the Regulation on the Adoption and Compliance with Nigerian Code of Corporate Governance 2018 do not provide sufficient information to enable the assessment the effect of the laws in Nigeria. The paper also questions the adaptability of transplanted corporate governance theories to Nigeria’s business environment. Nevertheless, the paper finds no dispute in the corporate governance approach in Nigeria's companies. Yet in a bid to avoid disputes, it recommends that companies' memorandum and articles of association contain provisions that clearly state and describe companies' corporate governance approach. Another recommendation is for policymakers to produce a regulation that in clear terms, supports company directors’ management approach so long as the directors pay attention to regulatory prescribed care and skill, and the same can be proved using the reasonable man standard. The final recommendation is for policymakers to produce similar regulations for different governance approaches.