ASSESSMENT OF CORPORATE GOVERNANCE AND ETHICS IN NIGERIA BANKING INDUSTRY: CHALLENGES AND OPPORTUNITY
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
ASSESSMENT OF CORPORATE GOVERNANCE AND ETHICS IN NIGERIA BANKING INDUSTRY: CHALLENGES AND OPPORTUNITY
ABSTRACT
The purpose of this research is to look into the concerns, challenges, and opportunities in the banking industry in Niger. Also, to examine if there is a link between corporate governance, ethics, and bank failure. A well-structured questionnaire was used to obtain relevant data.
Chi-square (X2) is a statistical tool used for data analysis and hypothesis testing. The research found that the new code of Corporate Governance and Ethics for Banks is adequate for mitigating bank distress and that improper risk management, corruption of bank officials, and over-expansion of the bank are the primary reasons for bank failure.
It is concluded that corporate governance and ethics are essential to the successful operation of banks and can only prevent bank distress if properly applied.
As it comprises conformance with the government’s prudential rules, recommendations on corporate governance and ethics should be used as a tool to assist stem the flow of hardship.
The Central Bank and the NDIC should make it mandatory for all banks to have authorised policies in place throughout their operations.
INTRODUCTION
1.1 Background of the Research
Financial scandals and misappropriation around the world, as well as the recent collapse of large corporate organisations in the United States and Europe, have highlighted the importance of practising sound corporate governance,
which is the system by which companies’ affairs are directed and controlled with the goal of increasing shareholder value and meeting the expectations of other stakeholders.
The case of Enron in the United States, as well as several cases in the United Kingdom, such as Polly Peck, Maxwell Communication, and British Ceylon Corporate Ltd (BCL), are all emphasising the importance of implementing effective corporate governance in our diverse organisations.
Given the industry’s role in providing credit to the needy sector of the economy, the payment and settlement system, and the implementation of monetary policy, the retention of public trust in Nigeria, particularly in the financial industry, remains an unassailable duty.
It is a valuable tool for guaranteeing corporate survival, as business confidence typically falls when a corporate organisation fails. The majority of recent business failures have been related to failings in corporate governance and ethical practises.
For example, the collapse of a bank in Nigeria from the early 1990s to the present was caused by bad corporate governance and ethics practises such as insider credit abuses, poor risk appreciation, and internal control failures.
To stem the tide of this dreadful tendency, experts and practitioners have continuously argued for distinct approaches and ideas to corporate governance and industrial ethics.
Appropriate disclosure on the risk profile of banks in the overall interest of the stakeholder is a critical tool in corporate governance (ICAN 2006, P. 345) defined “corporate governance as the system by which the affairs of companies are directed and controlled by those charged with the responsibility”
According to Magdi and Nadereh (2007), corporate governance ensures that the business is operated well and that investors obtain a fair return. Oyejide and Siyibo (2001) described corporate governance as the enterprise’s relationship with its shareholders, or, in a broader sense, the enterprise’s relationship with society as a whole.
1.2 Statement Of The Problem
Recent company failures around the world have sparked interest in corporate governance and ethics. Nigeria has been plagued with decadence in both the governmental and private sectors.
The political and corporate climates had deteriorated to the point where, by 1999, when the country reverted to democratic governance under Obasanjo’s leadership, it was classified as one of the most corrupt in the world.
Most public corporations, such as PHCN, NITEL, NNSL, and the water board, were either dead or just draining public resources, while the few factories that were still operational were operating at less than full capacity. The banks’ figures leave a path of misery.
For shareholders, investors, suppliers, depositors, employees, and other stakeholders. The manipulation of Cadbury Nigeria PLC’s financial statements in 2006, the liquidation of banks in the 1980s and 1997, and the current sacking of CEOs of nine Nigerian banks following CBN audit and investigation are all proof of the country’s terrible plight.
What safeguards should be put in place to prevent corporate collapse in the banking industry? How can organisations improve their corporate governance practises? How can the financial industry help? How can we ensure public trust?
This research was largely influenced by the requirement to provide answers to the queries.
1.3 Objectives Of The Study
The purpose of this research is to look into how corporate governance and ethics have been adopted in the Nigerian banking industry. To accomplish this, we want to:
1. Determine how corporate governance is practised in the Nigerian banking industry.
2. Determine the level of professional ethics adoption in our banking business.
3. Investigate the role of the shareholder and the board of directors in the management of the companies’ affairs.
4. Investigate the need for and requirements for corporate governance in the banking industry in order to ensure accountability and transparency.
5. Determining what factors contributed to banks’ low performance in the CBN’s 2009/2010 audit.
1.4 Research Questions
* What is the significance of corporate governance and ethics in the Nigerian banking industry?
* How do corporate governance and ethics influence organisational membership change?
* What is the relationship between corporate governance and ethics for banking industry members?
* To what extent may corporate governance and ethics norms be applied to the Nigerian banking industry?
* What aspects of corporate governance and ethics may be addressed in the Nigerian banking industry?
1.5 Hypothesis Proposition
The First Hypothesis
Ho: There is no correlation between corporate governance and bank performance.
Hi: Corporate governance and ethics have a direct impact on bank performance.
Hypothesis No. 2
Ho: Effective corporate governance and ethics in Nigeria’s banking industry do not promote high levels of accountability and transparency.
Hi: Effective corporate governance and ethics in the Nigeria banking business promote accountability and openness.
Three Hypothesis
Ho: company governance and ethics are ineffective in preventing company failures and scandals.
Hi: Corporate governance and ethics aid in the prevention of corporate failures and controversies.
1.6 The Significance of the Research
The significance of corporate governance cannot be overstated. It is a significant tool for corporate regulation. Corporate governance and ethics aid in the prevention of corporate failures and controversies. Corporate governance is defined as the relationship structure within an entity for making decisions and implementing them.
It is especially significant since it ensures accountability and openness in how an organisation is run. Stakeholder interests are best preserved, and financial scandals and fraud are eliminated if effective corporate governance and ethics are practised.
1.7 Scope of the Research
The purpose of this research is to investigate the evolving notion of corporate governance. Because of their function in financial responsibility and transparency, financial statements may represent an accurate and fair representation of their status.
It also wants to investigate the function of ethics in our financial industry as well as the roles in guiding corporate decision-making.
However, our work in the banking business is confined to corporate governance and ethics.
1.8 Limitations of the Research
Because of the challenges encountered, the ideal cannot be realised in this research work. Among them are:
• The time allotted for this research is insufficient to complete it. The population, as well as the conclusions, have been limited in scope.
• Due to financial constraints, the researchers were unable to visit with all of the designated population. As a result, multiple sampling strategies will be used.
• Difficulty in obtaining information from the company under investigation’s staff. This is because the majority of the documents requested by the researchers were not made available. In addition, most interviews were denied, and several surveys were either destroyed, returned, or not returned.
1.9 Definition of Terms
Corporate governance is described as the framework that directs and controls businesses.
Ethics is defined as the philosophical examination of human morals and behaviour.
Financial statements are used to communicate to interested parties information about the reporting entity’s or enterprise’s resources, liabilities, and performance.
Fraud: A purposeful or intentional conduct by a privileged individual or group of individuals within or outside the organisation that results in a financial statement deception.
The Central Bank of Nigeria: A banking system in which a single bank has a complete monopoly on note issuance.
Corporation: A corporation is defined as an organisation or group of organisations that is legally recognised as a single body.
Moral principles govern what is right and wrong, or what is good and bad behaviour.
Need help with a related project topic or New topic? Send Us Your Topic