Board Composition and Corporate Governance Mechanisms in the Nigerian Banking Sector

As a result of recent corporate failures the unique role played by directors has come under tremendous scrutiny and has led to legislation excerpts codifying director’s duties and responsibilities. It is clear that director’s ability to fulfill their responsibilities has an impact on shareholders, investors and the public, indeed on all stakeholders. The position in the Nigerian scenario is far from clear cut mainly because information available are largely the result of anecdotal evidence and limited empirical study. The central aim of this research is to engage in a critical analysis of the board structure in Nigeria with particular attention being paid to the perception of various stakeholders on board composition and corporate governance mechanisms in the Nigerian banking sector. The study raises interesting findings in relation to boards in the Nigerian context. In particular the study shows that boards are not fulfilling their role and responsibilities to the extent of the standards laid down in the applicable laws and codes. The findings show problems hindering sub-committees from efficiently and effectively fulfilling their role and responsibilities include appointments based on favouritism, personal contacts and majority shareholders, lack of independence of sub-committees, lack of relevant qualifications, lack of time commitment, non-implementation of recommendations made by sub-committees to the board and the propensity for bribes offered by banks in some instances which compromises the independence of regulatory supervisors. The study makes an empirical contribution to the growing body of literature in this area thereby providing a theoretical perspective on which future research and policy initiatives can be developed.