Corporate Governance and Restructuring

The views of the governors of the Central Bank of Nigeria (CBN) since 2004 would suggest that weak corporate governance was the single most important factor in precipitating the banking crisis in Nigeria. Generally, this refers to the processes that lead to decision making in the financial institutions, that is, the responsibilities and accountabilities of the decision makers, and the separation of powers between decision-making authorities, in order to achieve balanced optimal outcomes for the corporation. (See, for instance, a seminar paper presented by Folarin Alayande, one of the leading experts on corporate governance in Nigeria, at the 2010 National Conference of the Institute of Chartered Secretaries and Administrators of Nigeria in Lagos, 22–23 September (Alayande 2010).) Weak corporate governance in banking, according to Alayande, is synonymous with weak processes and structures at the board level. It causes an imbalance between decision makers at that level, so that a single shareholder or interest group can initiate and execute decisions that are detrimental to the long-term interests of the corporation and society.