2.2       Nature of Corporate Governance
            The nature of a thing entails the intrinsic or essential qualities of the thing.[1] Thus, every definition of corporate governance drawing from its intrinsic qualities also draws from the perceptions of the person defined. This, a glossary look at the various definitions and postulates of what the concept of corporate governance entails will help our understanding of the subject matter.

Corporate governance has been defined as the exercise of authority which involves not only the right to direct but also to lead and control within an organization.[2] Promoting corporate fairness, transparency and accountability.[3] According to Charles C. Okeahalam & Oludele A. Akinboarde, the,[4] the consensus of corporate governance ranges from balancing between economic and social goals and between individual and communal goals while encouraging efficient use of resources, accountability in the use of power and stewardship and aligingly the interests of individuals, corporations and society. I also encompasses the establishment of an appropriate legal, economic and institutional environment that allows companies to thrile as institutions for advancing long-term shareholder value and maximum human centred development while remaining conscious of their other responsibility to the shareholder, the environment and the society at large.[5] The basic tenets of corporate governance are accountability, efficiency and effectiveness integrity and Fairness, Probility, responsibility and transparency thus it refers to the broad ranges of policy and policies that stockholders, executive managers and board of directors use to manage the operations of corporate organizations towards fulfilling their responsibilities to the investors and other stakeholders of the society.[6] Corporate governance is concerned with the resolution of collective action problems among dispensed intentions and the reconciliation of conflicts of interest between various corporate claimholders.[7]
The organization for Economic Corporation and Development (OECD)[8] Examines corporate governance as:
The system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporate, such as the board members, shareholders and other stakeholders and spells out the rules and procedures for making decision on corporate affairs. By this, It also provides the structure through which the company objectives are set and the means of attaining those objectives and monitoring performance.[9]
The OECD Principles of Corporate governance and organized into five headlines namely9b The rights of the shareholders to deal with the protection of the shareholders to influence the behaviour of the cooperative; the right to secure method of ownership registration; convey or transfer of shares; obtain relevant information on the corporation on timely and regular basis; participate and vote in general shareholder meetings; elect members of the board and share in the profits of the coporation.9c

The Cadbury Final Report defines Corporate governance in terms of how a Corporate entity is directed and controlled.[10] It states it states:
Corporate governance is the system by which companies are directed and controlled. Boards of directives are responsible for the governance of their companies. The shareholder’s role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include secting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to law, regulations and the shareholders in general meeting.[11]
Corporate governance has been defined as building credibility, ensuring transparency and accountability as well as maintaining an effective channel of information disclosure that would foster good corporate governance performance, trust as well as sustaining confidence among various interest groups that make up an organization.[12] It includes the manner in which corporative are directed, controlled and held to account.[13] It is considered with effective leadership of corporatives to ensure wealth creation in a sustainable manner.[14]
Tricker in defining corporate governance states that corporate governance is concerned with the ways corporate entities are governed, as distant from the way businesses within those companies are managed thus it addresses the issues facing the board of directors such as the interaction with top management and relationship with the owners and other interested in the affairs of the company.[15]
D. A. Guobadia[16] in explaining farmer’s definition[17] of corporate governance prifers three aspects of corporate governance which include. The direction of a company’s all round growth and development, relationship between the board of directions and management and shares accountability and disclosure.[18] It is not just about compliance with rules but about responsibility to all stakeholders of the fair, transparent and accountability.[19] It ideal provides a level of disclosure and transparency regarding the conduct of corporations and their board of directors that enables the supervisors of their accountability while ensuring that they comply with their legal obligations and remissions, are accountable to shareholders and responsible to stakeholders including employees, supplies, creditors, customs and communities and act responsibility regarding the environment.[20]
The concept of corporate governance implicates rules and regulations that ensures that a company is governed in a transparent and an accountable manner such that the enterprise surtives and meets the expectation of its shareholders creditors and stakeholder of its shareholders, creditors and stakeholders, which society forms a large of.[21]
Corporate Governance has also been defined as institutional systems and protocols meant to ensure accountability an sound ethics[22] a process of customs, policies, systems laws and procedures that govern institutions and the manner these rules are applied and controlled;[23] an institutional arrangement which provide the discipline and check over excesses of controlling mangers.[24]
A closer look at the definitions brings to light the diverse perspectives in which corporate governance is seen. In the above definitions, we can see the following views: a narrow view[25] which concerns entity is managed and receives its basic orientation and direction and a board perspective[26] in which it is regarded as being the heart of both a market economy and a democratic society.
It has also been divided into broad classifications[27] of internal[28] and external governance.[29]
This include law and regulation (specifically federal law, self regulatory organisations and state law); market 1 (including capital market and product market); market 2 emphasising providers of capital market information; market 3 focusing on accountability, financial and legal services from parties external to the firm; private sources of external oversight particular generally op.cit at note 26 pp. 384.
Corporate governance in all ecompasses so many things ranging from corporate discipline, transparency, independence, accountability, fairness and social responsibility and[30] so much more but a look at other aspects of the subject matter of corporate governance will reveal more of the very nature of corporate governance.

2.3       Formation of Companies and Public Listing/quoting in Nigeria

2.4       Corporate Governance and Ownership Structure of Companies in Nigeria
The need for corporate governance arises because of the separation of management and ownership in the modern conplanation[31] thus ownership is a total aspect in corporate governance. Good corporate governance being a diligent way in which providers of corporate financial capital guarantee appropriate rewards in a legal and ethically moral way and having both internal and external ways of achieving this. This first is through the structure of ownership (shareholding concentration and voting rights) and board of directors or supervisory in some regulatory regime.

[1]           Encarta Dictionaries
[2]           Dominic Asada, “Trends in this development of Modern Corporate Governance and Management Principles”, www.doc1p.3
[3]           See James Wolfensohn’s definition of corporate governance, (The World Bank) http://worldbank, see generally Dominic Asasa (id
[4]           See A Review of Corporate Governance in Africa Literature, issues and challenges” (2003) A Paper prepared for Global Corporate Governance Forum www.DOc pp.4
[5]           Id at Page 4
[6]           Inyang Benjamin; Nutuing Corporate Governance System: The Emerging Trends in Nigeria,” Journal of Business Systems, Governance and Etchnic: Vol. 4, No 2 pp. 3 &4
[7]           Marco Becht, Patrick Bolton et al (2005) ecgi (Emylean corporate Governance Institute)
[8]           See the OECD (Organisation for Economic Co-operation and Development) Principles of Corporate Governance” (1999), available at See generally, Asada Dominic, “Effective Corporate Governance and Management in Nigeria: An Analysis”.
[9]           Id
9c        See Nicholas, Garin J. et al,. “Boars Composition an Corporate Performance: How the Australian Experience Informs Contrasting Theories of Corporate Governance,” (2003), Corporate Governance: An International Review 11 (3) pp.4 Available at
9c        These headlines are organized into five principles(4) Rights of  Shareholders(2) Equitable treatment of shareholders. The role of stakeholders in corporate governance (4) Disclosure and transparency (5) the responsibilities of the board. See Olivier Fremoral & Mierta Capaul,. “The State of Corporate Governance Experience from Country Assessments” (2002) World Bank Policy Research Working Paper 2858. Available at .org.
[10] Joash Ojo Amupitan, “Privatisation and Corporate Governance in Nigeria” (2007)
[11] This view has been expressed to be for restrictive and control onlerted because much of the emphases was on the controlled side of things rather than on the formulation of policy and the development of strategy, which are the powers of the shareholders and trinitation impose by law which are the starting points of good corporate governance. See generally Id.
12Sanusi S. O. “Enhancing Good Corporate Governance, A Strategy for Financial Sector Soundness.” A Keynote Address Presented at the Dinner Night of the chartered Institution of Branches Nigeria Nov. 8, 2002. Available at
13Inam Wilson, “Regulatory and Institutional Challenges in Nigeria Post Banking Consolidation. pp.1 www.Doc
[14] Id. Pp.1
[15] See Chambers A. Tolley’s corporate Governance Handbook, 2nd ed. Reed Elseier (UK ltd 2000) Contained in Joash O. A. Op Cit at note 10. He desribes the process of corporate governance as having four principles activities – Direction involves formulating the strategic directions for the future of the enterprise in the long run. Executive action deplicts the involvement in crucial executive decisions. Supervision entails the monitoring and oversighting of  management performance and accountability is in recognizing responsibility to those making legitimate demand for accountability. Joash O.A. pp. 178.
16The Rules of Efficient Corportate Governance and the method of Efficient Implementation. A Nigerian Experience (2001) 22(4) Company lawyer 119 at 120, See generally Joash O – A op cit at note 10 pp. 179.
17He defined corporate governance as a process of direction of a company, the relationship between the board of directors and management and it is also untimely about regimess of accountability
[18] See generally Joash Op. at note 10
[19] Anthony Idighe, “A Review of CAMA 1990: Issues Auditor Indulgence”  (2007), Auditor A. Committee and Auditor Indeligence” (2900), A Player delivered at Nigerian Accountability Standard Board 4th Annual corporate Financial Reorting Summit Dinne.
Subenu O. J & Aremu O. S., “Corporate Governance and Merger Activity in the Nigeria Banking Industry” (2010). Pp. 1
[21] Nworji, Adebayo & Adeyanju, “Corporate Governance and Bank Failure in Nigeria: Issue Challenges and Opportunities “(2011) Research Journal of Finance & Accountability Vol. 2, No. 2 pp. 3, available at
[22] Nwakama P-C et al, An Empirical Evaluation of Corporate Governance Mechanism in Banking Sector: Impact and Implication in Nigeria,” Asian Journal of Banking and Management Sciences Vol. 1 No. 2 pp 2 & 3. Available at
[23] See Central Bank of Nigeria Website (2010) See general Id.
[24] Aemaki G-O, “Philifederation of Codes of corporate Governance in Nigeria and Economic Development” (2011) Business and Management Review vol. 1. (6) pp. 2. Available at
[25] Oyejide A. & Adedoyin S. “Corporate Governance in Nigeria,” (2001) A Paper Presented at the conference in Nigeria” conference of corporate Governance Accra Ghana. This pleceives coporate governance in terms of issues relating to shareholders protection, management control and the popular principle – agency problems of economic theory.
[26] This drawing from the privatization crusade in developing countries refers to issues of institutional, legal and capacity building as well as the rule of law. Id.
[27] Gillian S. L., “Recent Developments in corporate Governance, (2006) Journal of corporate Finance pp. 382. www.doe
[28] This Id. This is divided into five basic categories board of directors; managerial incentives; Capital Structure; Byelaw and Charter Proristors and Internal Control Systems.
[29] This include law and regulation (specifically federal law, self regulatory organizations and state law); market 1 (including capital market and product market); market 2 emphasising providers of capital market information; market 3 focusing on accountability, financial and legal services from parties external to the firm; private sources of external oversight particular generally op.cit at note 26 pp. 384.
[30] See Central Bank of Nigeria of Nigeria (CBN) Website (2010). This includes timely and accurate disclosure of all material matters regarding a company including the financial situation, performance, ownership and governance agreements and compliance with legal and regulatory requirements, see generally Nwakama P. C. Op Cit at note 22.
[31]             Charles C. Okeahalam, “A Review of corporate governance in Africa: Literature, Issues and Challenges (2003) www.Doc pp.3
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