Corporate Governance Reform in Nigeria: Upstream and Downstream Interventions

Purpose - Internal (e.g., firm performance, internal stakeholders) and external pressures (e.g., globalisation, technology, corporate scandals) have intensified calls for corporate governance reforms across varieties of capitalism. Yet, corporate governance practices among developing economies remain problematic. Drawing insights from Africa’s largest economy (Nigeria), this research relies on the resource dependence theory to address two questions - what are the prerequisites for effective reforms; and, what reforms yield robust corporate governance? Design/methodology/approach - The study adopts a qualitative methodology comprising semi-structured interviews with 21 executives in publicly-listed Nigerian firms. The interviews were analysed using the content analysis technique. Findings - This article proposes two sequential reforms (i.e., the upstream and downstream). The upstream factors highlight the preconditions that support corporate governance reforms, i.e., government commitment and enabling environment, while the downstream reforms combine elements of awareness and regulation to proffer robust corporate governance interventions. Originality/value - This research further stresses the need to consider a bottom-up approach to corporate governance in place of the dominant top-down strategy. This strategy allows agents to participate actively in corporate governance policy-making rather than a top-down model, which imposes corporate governance on agents

Examining the Link Between Religion and Corporate Governance: Insights From Nigeria

This article examines whether the degree of religiosity in an institutional environment can stimulate the emergence of a robust corporate governance system. This study utilizes the Nigerian business environment as its context and embraces a qualitative interpretivist research approach. This approach permitted the engagement of a qualitative content analysis (QCA) methodology to generate insights from interviewees. Findings from the study indicate that despite the high religiosity among Nigerians, religion has not stimulated the desired corporate governance system in Nigeria. The primary explanation for this outcome is the presence of rational ordering over religious preferences thus highlighting the fact that religion, as presently understood and practiced by stakeholders, is inconsistent with the principles underpinning good corporate governance

Corporate governance regulation: a practice theory perspective

Employing Bourdieu’s practice theory, this paper explores factors that influence corporate executives’ behaviour towards corporate governance regulation. Drawing insights from a weak institutional environment (Nigeria) and relying on a qualitative research methodology (semi-structured interviews with 31 executives), this research uncovers how nine nuanced situational and cultural field factors determine executives’ regulatory response to the severity of punishment, the certainty of penalties, and the cost-benefit compliance considerations. The study further explains how sequential rationalisation between the severity and certainty of punishment contributes to the regulatory apathy that executives exhibit. Theoretically, this study demonstrates how practice theory components (habitus, capital, and field) blend to establish executives’ regulatory practice

Nigerian professional investors' sensemaking of the impact of shareholder activism on corporate accountability

This study investigates the perceptions of professional investors (PIs) on the impact of three groups of shareholder activists (i.e., reputable, sophisticated, or institutional) on corporate accountability in a weak institutional context and how this shapes the PIs’ investment recommendations. Relying on a sense-making theoretical perspective of the power and competence of shareholder activists obtained through semi-structured interviews with 27 Nigerian PIs, we reveal that the impact of shareholder activism occurs in three activism-accountability dimensions: dominant, insignificant, and emerging. Subsequently, we unpack factors that explain the power and influence of the dominant activism of reputable activists, the insignificant activism of sophisticated activists and the emerging activism of institutional activists. By advocating a contextual understanding of shareholder activism, this article sheds much-needed insights into the concept of ‘activism-accountability’ in a weak institutional environment

An assessment of budgeting and budgetary controls among SMEs: Evidence from a developing economy

Purpose: The capacity to plan, manage, and control small and medium enterprises (SMEs) is critical to realising their organisational goals. This paper assesses the effectiveness and perception of budgeting and budgetary control systems among SMEs. Design/Methodology: Relying on the goal-setting theory (GST) and a methodology that accommodates questionnaires, data was collected from 170 manufacturing SMEs located in Cape Town, South Africa. Findings: Research results affirm that the deployment of budgeting benefits from a positive perception of the value of budgeting and budgetary controls by key SME stakeholders. The study also finds that the perception of budgeting mirrors the level of education of SME operators, as educated respondents understand the value of implementing robust budgeting systems. Despite its focus on manufacturing SMEs, this study suggests that the manufacturing budget is the least utilised budgeting system among these organisations. Practical implications: The study reinforces the communication power of budgeting and budgetary controls as SMEs and economic agents are not only aware of corporate objectives but are equally incentivised to support the attainment of these objectives. Originality/Value: Despite the extensive application of GST among scholars, its use in budgeting and budgetary control literature, particularly among SMEs in developing contexts, is limited. In line with GST, this study indicates that when agents establish and implement a plan, they are motivated to pursue and realise the set expectations while consistently evaluating themselves for improvement opportunities

Institutional perspectives on corporate governance reforms in Nigeria

Corporate governance in developing countries is becoming noticeable in the extant literature. In this chapter, we review the development of the corporate governance discourse in Nigeria, paying attention to the challenges of promoting good governance standards through reforms. Relying on institutional theory as against the widely-engaged agency framework, we account for the institutional determinants of corporate governance reforms in Nigeria. We analyse the intricacies of the institutional context in developing countries and their complementarity (or deviance) with the prevailing corporate governance regulatory system

Relational governance mechanisms as enablers of dynamic capabilities in Nigerian SMEs during the COVID-19 crisis

During the COVID-19 crisis, small and medium-sized enterprises (SMEs) in developing markets, marred by significant institutional voids, grappled with a perennial lack of resources. This article seeksto understand how these SMEs activated their dynamic capabilities to manage business relationships during different phases of the crisis. Relying on the social exchange theory and drawing on semi-structured interviews with 42 business-to-business (B2B) SME owners in Nigeria, we examine the relational governance mechanisms of dynamic capabilities for SMEs during the COVID-19 crisis. Our findings reveal 12 relational governance mechanisms of dynamic capabilities of B2B SMEs. Furthermore, we disaggregate these 12 mechanisms into 34 relational governance micro-foundational components and demonstrate their relevance for B2B SMEs during different stages of the COVID-19 crisis in Nigeria

A Review of Internal and External Influences on Corporate Governance and Financial Accountability in Nigeria

No country exists in isolation, and as developing countries like Nigeria aspire to international standards of accountability and governance suited to the developed economies, they are confronted with the reality that it is difficult to separate the sociocultural context in which they operate from the external pressures to conform. This literature review provides deep insights into the developments in corporate governance and accountability in Nigeria, and in particular the influence of internal and external factors. While the extant literature suggests that the lack of corporate governance structures limits improvements in developing economies, we argue that the appropriateness, and the effectiveness of regulatory compliance systems explains corporate governance infractions in the country. We contribute to comparative corporate governance discourse, presenting important implications for key players in corporate governance development and monitoring, across global polity and practice