The Implementation of OECD Corporate Governance Principles in Nigeria: Evidence from Stakeholders’ Perspectives


The Implementation of OECD Corporate Governance Principles in Nigeria: Evidence from Stakeholders’ Perspectives


Ologunwa, O.Pa, Simon-Okea, O.O, Egbetunde, T.a

aDepartment of Economics, School of Management Technology, Federal University of Technology, Akure


International Journal of Industrial and Business Management

This study investigates the stakeholders’ perspectives on the implementation of Organization for Economic Cooperation and Development (OECD) corporate governance principles in Nigeria. The study adopted an ex-post research design with a structured questionnaire to elicit information from the respondents. The descriptive statistical method was also considered as analytical techniques. Findings revealed that shareholders in Nigerian firms have the right to participate in profits of the firm; they have the right to vote in general meetings and also have the right to obtain information about voting rights before purchase of shares. However, the study found that the details about the capital structure, financial and operating reports of firms were not fully disclosed. It was also discovered from the study that ownership transfer among shareholders was poorly facilitated, with minority shareholders not fairly treated. The study concludes that board of directors usually takes the interest of shareholders’ more important than the stakeholders interest in the firms. It was however suggested that corporate governance framework in Nigeria should recognize the rights of stakeholders established by law or through mutual agreements; and encourage wealth creation and employment opportunities for sound financial sustainability of corporate firms.


Keywords: Corporate Governance, OECD Principles, Stakeholders, Firms’ Performance and Nigeria


Free Full-text PDF


How to cite this article:
Ologunwa, O.P, Simon-Oke, O.O, Egbetunde, T.The Implementation of OECD Corporate Governance Principles in Nigeria: Evidence from Stakeholders’ Perspectives. International Journal of Industrial and Business Management, 2019; 3:12.


References:

1. Aguilera, R.V, and Cuervo-Cazurra, A (2009). Codes of Good Governance, Corporate Governance: An International Review, Vol. 17, No. 3, pp. 376–387.
2. Ahmed, E. and Hamdan, A. (2015). The Impact of Corporate Governance on Firm Performance: Evidence from Bahrain Bourse. International Management Review, 11(2), 21-37.
3. Al-Tamimi, H and Charif, H (2012). Corporate Governance Practices and the role of the Board of Directors: Evidence from UAE Conventional and Islamic Banks, Corporate Ownership and Control, Vol.10, No. 2, pp. 207–213.
4. Awotundun, D, Kehinde, J and Somoye, R (2011). Corporate Governance and Stakeholders Interest: A case of Nigerian Banks, International Journal of Business and Management, Vol. 6, No. 10, p. pp. 102-112.
5. Berman, S.L, Wicks, A.C, Kotha, S and Jones, T.M (1999). Does Stakeholder Orientation Matter? the relationship between Stakeholder Management Models and Firm Financial Performance, Academy of Management Journal, Vol. 42, No. 5, pp. 488–506.
6. Chen, W.P, Chung, H, Lee, C and Liao, W.L (2007). Corporate Governance and Equity liquidity: Analysis of S&P Transparency and Disclosure Rankings. Corporate Governance: An International Review, Vol. 15, No. 4, pp. 644-660.
7. Cheung, Y.L, Connelly, J.T, Jiang, P and Limpaphayom., P (2011). Does Corporate GovernancePredict Future Performance? Evidence from Hong Kong’, Financial Management, Vol. 40, No. 1, pp. 159-197.
8. Chhaochharia, V and Laeven, L (2009). Corporate Governance Norms and Practices, Journal of Financial Intermediation, Vol. 18, No. 3, pp. 405-431.
9. Comford, A (2004). Key Financial Codes and Standards: Different Views of their Role in a New Financial Architecture’, Unpublished Paper prepared for the Multi-Stakeholder Consultations on Systemic Issues, Organized by the New Rules for Global Finance Coalition in cooperation with the United Nations Financing for Development Office.
10. De Andres, P, Azofra, V and Lopez, F (2005). Corporate Boards in OECD Countries: Size, Composition, Functioning and Effectiveness’, Corporate Governance: An International Review, vol. 13, No. 2, pp. 197-210.
11. Doidge, C, Karolyi, G.A and Stulz, R.M (2004). Why Are Foreign Firms listed in the US Worth More, Journal of financial economics, Vol. 71, No. 2, pp. 205—238.
12. Gill, A. (2009). CLSA Watch: Corporate Governance in the Emerging Markets. New York: CLSA CG.
13. Gillan, S.E and Starks, E.T (2000). Corporate Governance Proposals and Shareholder Activism: The Role of Institutional Investors, Journal of financial economics, Vol. 57, No. 2, pp. 275-305.
14. Givoly, D and Palmon, D (1985). Insider Trading and the Exploitation of Inside Information: Some Empirical Evidence, Journal of business, Vol. 58, No. 1, pp. 69-87.
15. Harabi, N (2007). State of Corporate Governance in Arab Countries: An overview, Munich Personal RePEC Archive, paper No. 4566, University of Applied Sciences, Northwestern Switzerland,
16. Jang, H and Kim, J (2001). Korea Country Paper: The Role of Boards and Stakeholders in Corporate Governance. The Third OECD Asian Roundtable on Corporate Governance, Singapore, 4th-6th April 2001, pp. 1-15,
17. Jesover, F and Kirkpatrick, G (2005). The Revised OECD Principles of Corporate Governance And Their Relevance to Non-OECD Countries, Corporate Governance: An International Review, Vol. 13, No. 2, pp. 127-136.
18. Karpoff, J.M., Malatesta, P.H and Walkling, R.A (1996). Corporate Governance and Shareholder Initiatives: Empirical Evidence, Journal of Financial economics, Vol. 42, No. 3, pp. 365-395.
19. Khaled, M.O (2014). Corporate Governance and Firm Performance in United Arab Emirate, College of Business, Victoria University of Melbourne Australia. Pp. 156-164
20. King, T-HD and Wen, M-M (2011). Shareholder Governance, Bondholder Governance, and Managerial Risk-Taking, Journal of Banking and Finance, Vol. 35, No. 3, pp. 512-531.
21. Klapper, L.F and Love, I (2004). Corporate Governance, Investor Protection, and Performance in Emerging Markets, Journal of corporate Finance, Vol. 10, No. 5, pp. 703-728.
22. Magbagbeola, N.O. (2005). Governance Structure, Managerial Characteristics and Firm Performance in the Nigerian Banking Industry. Final Report Submitted to the AERC, South Africa (Dec).
23. Mak, Y. T., and Li, Y. (2001). Determinants of Corporate Ownership and Board Structure: Evidence from Singapore. Journal of Corporate Finance, 7(3), 235-256
24. Mak, Y., Kusnadi, Y. (2005). Size Really Matters: Further Evidence on the Negative
25. Relationship between Board Size and Firm Value. Pacific-Basin Finance Journal, Vol. 13, pp. 301–318.
26. Mallin, C and Melis, A (2012). Shareholder Rights, Shareholder Voting, and Corporate Performance, Journal of Management and Governance, vol. 16, No. 2, pp. 171-176.
27. Morck, R., Shleifer, A., and Vishny, R. W. (1988). Management Ownership and Market Valuation: An Empirical Analysis”, Journal of Financial Economics, 20(2), 293-315.
28. Mulili, B.M & Wong, P (2011). Corporate Governance Practices in Developing Countries: The Case for Kenya, International Journal of Business Administration, Vol. 2, No. 1, pp. 14-27.
29. Murphy, A and Topyan, K (2005). Corporate Governance: A Critical Survey of key Concepts, Issues, and Recent Reforms in the US, Employee Responsibilities and Rights Journal, Vol. 17, No. 2, pp. 75-89.
30. Nestor, S and Jesover, F (2000). OECD Principles of Corporate Governance on Shareholder Rights and Equitable Treatment: Their Relevance To The Russian Federation’, 2nd OECD/World Bank Corporate Governance Roundtable for Russia, Moscow.
31. OECD (2004). OECD principles of corporate governance, OECD, Paris.
32. Okpara, J.O (2011). Corporate Governance in a Developing Economy: Barriers, Issues, and Implications for Firms, Corporate Governance, Vol. 11, No. 2, pp. 184-199.
33. Prugsarnatz, N.C (2010). Corporate Governance Effects on Firm Value and Stock Market Performance: An Empirical Study of the Stock Exchange of Thailand-100-index listed companies, e- Journal, Vol. 3, no. 2, pp. 35-49.
34. Sengur, E.D (2011). Do Corporate Governance Index Companies Outperform Others? Evidence From Turkey. International Journal of Business and Social Science, Vol. 2, No. 14, pp. 254-260.
35. Shanikat, M and Abbadi, S.S (2011). Assessment of Corporate Governance in Jordan: An Empirical Study, Australian Accounting Business and Finance Journal, Vol. 5, No. 3; pp. 93-106.
36. Zikmund, W.G (2010). Business Research Methods, 8th edition, South-Western Cengage Learning, Mason, OH.