Shareholder Protection: A Comparative Review of the Corporate Legal / Regulatory Regimes in the UK and Nigeria

Abstract

AbstractForeign investment is a major source of the capital that Nigeria and other developing markets need to promote economic activities and drive economic development. While profit mainly drives the decision to invest abroad, such decisions are also influenced by the safety of any actual investments made. Thus, investors are interested in the laws and regulations that offer them protection against corporate insider opportunism. In Nigeria, the relationship between corporate actors is mainly regulated by the Companies and Allied Matters Act (CAMA). This article investigates the corporate legal and regulatory protection for corporate shareholders in Nigeria and the UK. Comparing the corporate regulatory regime in the two jurisdictions, this article argues that the identified weaknesses in the Nigerian regulatory framework negatively impact the growth of foreign investment in the country. In view of these weaknesses, the article suggests a major review of CAMA and other regulatory instruments with a view to addressing the protection of small investors and “outsiders”, such as foreign investors.