Corporate Governance Issues in the Nigerian Banking Industry

Corporate Governance Issues in the Nigerian Banking Industry by Oyebola Akande MBA, Ladoke Akintola University of Technology, 2007 BA, The Federal Polytechnic, Ilaro, Ogun state, 2000 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2016 Abstract Corporate governance issues resulting from bad governance, fraudulent activities, insider abuse, and corruption have attracted the attention of shareholders and regulators in the banking industry. The financial crisis that erupted from the United States affected the financial institutions of both developed and developing countries, among which Nigerian banks belong. The Central Bank of Nigeria removed 8 managing directors and executive directors due to bad governance, nonperforming loans of 61%, and toxic assets of $13.3 billion; the Central Bank injected 620 billion naira into the banks. The purpose of this multiple case study was to develop an understanding of corporate governance strategies needed to ensure regulatory compliance and enhance financial performance from the perspective of senior management of the regulatory authority and corporate financial leaders. Agency theory served as the conceptual framework for the study. The population for this study was10 senior regulatory leaders and corporate financial leaders in Nigeria. The data sources were semistructured interviews, research notes, codes of corporateCorporate governance issues resulting from bad governance, fraudulent activities, insider abuse, and corruption have attracted the attention of shareholders and regulators in the banking industry. The financial crisis that erupted from the United States affected the financial institutions of both developed and developing countries, among which Nigerian banks belong. The Central Bank of Nigeria removed 8 managing directors and executive directors due to bad governance, nonperforming loans of 61%, and toxic assets of $13.3 billion; the Central Bank injected 620 billion naira into the banks. The purpose of this multiple case study was to develop an understanding of corporate governance strategies needed to ensure regulatory compliance and enhance financial performance from the perspective of senior management of the regulatory authority and corporate financial leaders. Agency theory served as the conceptual framework for the study. The population for this study was10 senior regulatory leaders and corporate financial leaders in Nigeria. The data sources were semistructured interviews, research notes, codes of corporate governance, and financial reports of banks. Member checking was used to improve the credibility and trustworthiness of the data. After compiling, disassembling, reassembling, and coding the data, 5 themes including the need for: improvement on compliance to corporate governance regulations; effective board governance; training education and awareness on best practices, strategic risk management and internal control; and strategic and effective leadership. Potential implications for social change may include knowledge for investors and the public, who have increasingly relied on financial services in Nigeria to support personal and business goals to identify banks with best practices. Corporate Governance Issues in the Nigerian Banking Industry by Oyebola Akande MBA, Ladoke Akintola University of Technology, 2007 BA, The Federal Polytechnic, Ilaro, Ogun State, 2000 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University June 2016 Dedication I dedicate this doctoral dissertation to the Almighty God, for HIS grace, mercy, strength, provisions, and the enablement to achieve this doctoral degree. I also want to dedicate this degree to my son Mr. Olajuwon Olatunji, for his prayers, support, understanding, encouragement and sacrifices through the journey of this doctoral degree, With God’s grace and the prayers of Olajuwon and my family, I was able to make a dream a reality. I would like to use this opportunity to remember those who have the knowledge but lack finance and support to achieve their academic desire. Acknowledgments I want to give thanks to the God Almighty, my source of life, my inspiration and my strength, who made this doctoral degree possible for me to start and complete. I am very grateful to my Chair, Dr. Kevin Davies (Committee Chairman) whose guidance, motivation, mentoring and advice got me through the journey of my doctoral degree. I will also like to thank Dr. Yvette Ghormley (Committee Member), Dr. Peter Anthony (URR) and Dr. Turner (Program Director) for their encouragement and immense contribution to this study. Additionally, I will like to thank Gabbidon for his support through my doctoral Journey. I sincerely appreciate the role my family has played in my life during my struggles, My Parent Mr. & Mrs. J. A Akande, My son Olajuwon Olatunji, and my siblings Rev. Abayomi Akande, Samson, Philip and Leah. Your prayers, motivation and strength have made me achieve this height in my academic pursuit. I also want to thank Dr. Ayo Teriba, Dr. Emmanuel Adegbite and Franklin Nakpodia for their motivation and guidance in making this endeavour. My good friends, Funmilola Amo, Mary (Atampa), and Ibrahim Tumsa for their support and encouragement to succeed in this my life endeavor, I am grateful. I cannot forget the role of my pastors’ towards this academic pursuit and my life, Rev. (Dr.) Israel Akanji and Rev. Tom Takpatore for their prayers and support. I sincerely appreciate everyone who gave me hope and motivated me to pursue this doctoral degree. I am grateful to you all.