An Analysis of Judicial Intervention and Enforcement as Panacea to Corporate Misgovernance in Nigeria.

Abstract

In Nigeria, today, some of the products and services we use to love while growing up and the companies that manufactured them are no more available due to failure on the part of the company’s management to follow basic corporate governance. Good corporate practice boosts investors’ confidence and good reputation that attracts foreign direct investment into the company and the economy through transparency, accountability, fairness, and responsibility. Key regulators such as the Securities Exchange Commission, the Nigeria Stock Exchange, Institutional Investors, Professional Associations, the Central Bank, and the Courts continue to improve their regulatory frameworks. (Ogbechie, 2013). The significance of corporate governance continues to raise several questions in Nigeria, and enforcement remains the primary problem in Nigeria. Accordingly, there has been emerging debate regarding courts’ enforcement of corporate governance through interpretation of relevant legislations and the application of the corporate governance codes where the law does not exist. This study addresses the questions of whether courts play any role in the in mitigation of corporate misgovernance in Nigeria, in what ways and if they have the capacity to do so. This research finds that court interpretation and enforcement measures enhance good corporate Governance in Nigerian companies and prevent corporate failures. However, though judicial interventions, have been found to deter corporate mismanagement, such measures and guiding principles are rarely sought by stakeholders. The research recommends that increased recourse to judicial procedures and enforcement measures can deter any wrongdoing committed by the companies and their directors. Furthermore, given in courts should be adequate to discourage companies and their directors from wrongdoings.