SOURCE:

Faculty: Law
Department: Law

CONTRIBUTORS:

Udu, E. A.
Amucheazi, O. D.

ABSTRACT:

Corporate governance is the system by which companies are directed and controlled. Certain principles of corporate governance have evolved through customs, policies, laws and institutions. Some companies have collapsed, depicting the inescapable consequence of bad corporate governance. Weak corporate governance in any jurisdiction dispels foreign direct investments and depreciates share prices which inflict grave commercial harm on the capital market generally. Conversely, good corporate governance has positive effect on not only the company but also the stakeholders such as the customers, suppliers, government and the community in which the company operates, ultimately leading to a strengthened economy. The economic health of the Nigerian community depends substantially on how sound and ethical companies conduct their businesses. Therefore, this research work sought, among other things, to evaluate the impact of corporate governance on the company as well as the stakeholders, and to examine the measures adopted to forestall the collapse of incorporated companies. It also focused on mainstreaming financial reporting and risk management as essential tools in repositioning good corporate governance. The thesis of this study is that good corporate governance is of great positive impact in the sustenance of companies and the Nigerian community. The methodology employed in this research work is basically doctrinal with an extensive literature review. A critical approach in the analysis of relevant statutory provisions and judicial authorities was largely adopted in this work. Materials from journals and internet facilities were also considerably utilized. In order to achieve the objectives, this research work was divided into eight chapters. It was observed in this study that lack of proper and effective governance framework in Nigeria has been exploited by senior managements of the corporate institutions to the detriment of other stakeholders. It was also found that there exist paucity of mechanisms to enforce the extant corporate governance laws and codes. Apart from the corporate institution, the community and the society at large, all suffer in no small measure in the event of corporate collapse resulting from poor corporate governance. This is because corporate governance is all about performance strengthened by the appropriate legal framework. This work therefore recommends that there should be an established professional qualification for board members as a means of ensuring high level of professionalism and competence in the control and management of the business of a company. It is further recommended that a well defined and effective enforcement mechanism be adopted to ensure a strict adherence to the established codes of good corporate governance for companies and other corporate bodies both private and public. This will enhance good corporate governance and ultimately engender strengthened economy in Nigeria.