In recent years, corporate governance has assumed considerable significance as a veritable tool to ensure corporate survival since business confidence usually suffers each time a corporate entity collapse. An effective corporate governance mechanism, backed up with adequate monitoring and enforcement regime, has been shown to build investors’ confidence, eliminate financial scandals and curb corporate failures. Thus, Anthony Arabome1, at the 19th yearly public lecture of the CIPM held in November 2015 in Lagos, stated that Nigeria as a country aiming to attract foreign investors and national development, cannot underestimate the value of sound corporate governance, a first-order condition for building successful nations, institutions and businesses.2 Hence, corporate governance remains a mechanism with the potential of raising the standards of performance and driving reforms for corporate growth and achievement. Accordingly, the aim of this paper is to examine the legal and regulatory foundations for effective corporate governance. It seeks to achieve this by discussing what corporate governance means, the reason it was introduced into corporate organizations, the regulatory framework for corporate governance in Nigeria, and further determine if there is a universal/international code. Finally, it shall discuss how members of the public are to be treated when they are faced with issues on how corporation behaves and what the corporation should do to assuage their feelings.
The concept, “corporate governance” is flooded with definitions. Different scholars, organizations, theorist alike has made attempts and efforts to define the concept of corporate governance. The concept has usually been given the functional definition of the way and manner a company is controlled and directed so as to achieve its objectives.
Described as a nebulous concept, Wilson defines corporate governance as the manner in which corporations are directed, controlled and held to account with special concern for effective leadership of the corporations to ensure that they deliver on their promise as the wealth-creating organ of the society in a sustainable manner.