Why Nigerian Firms Need More in the Way of Corporate Governance

Fraud, greed, embezzlement are not negative aspects of politics alone in Nigeria. As politicians loot in billions so too do some CEOs. It is reiterated that only companies with high regard for corporate governance possess the chance to last longer.

Take for example the banking and finance sectors where corporate governance exists; it is the responsibility of the Central Bank of Nigeria (CBN) to enforce strict compliance of the ethical standards governing banking transactions. Not that these institutions themselves do not have a form of corporate governance of some sorts. Such sectors have over the time, been able to control all players in their industries. They also ensure healthy competition among players, and this same measure should be maintained in other sectors.

Nigerian companies have to realize that corporate governance helps smooth out decision making. According to an industry expert, "the principle of corporate governance is in transparency and accountability to both the stakeholders and the industry regulator." Companies that do not imbibe the spirit of corporate governance and adhere strictly to its rules, may never survive for a long period of time.

Regulators, such as the CBN, "through corporate governance, will be able to read pointers, balance growth and competition among operators, and ensure there is no dominant operator among the operators, as we as identify early distress among operating companies." The expert concluded.

Every company has to monitor the ethical behaviour of its employees and also make sure that they carry out their duties of running the business in the proper manner every day. CEO's take-home pay has to be in check because many get overpaid. No matter what happens, CEOs must become more active in the running of their businesses each day. In other parts of the world such as in the west, this is the case. CEOs are becoming more responsible for their actions. They are becoming more compliant. CFOs must also make it a point of duty to always tell the truth to management board.

These and a few other steps need to be taken in order to avert frequent corporate scandals. Especially more so is this the case in larger firms where lack of proper oversight has led to great scandals.

Like Checklist Business Magazine on Facebook