The effect of culture on corporate governance practices in Nigeria

Abstract

This study focuses on the effect of culture on the application of corporate governance practices in Nigeria. Corporate governance has been receiving serious attention in emerging markets over the past 2 decades. But relatively little attention has been given to the study on corporate governance in a country study. The current situations in Nigerian public and private sectors such as the corporate scandal resulting from Lever Brothers Nigeria Plc, Siemens, Shell, Halliburton, and Cadbury Nigeria Plc, have shown that the issue of fraud, corruption, and corporate scandals cannot be overlooked. Most top management, as this study argues, brings in beliefs acquired from their early childhood into their senior management roles and responsibilities. This study adopts a grounded theory and reports on the effect of culture on the implementation of corporate governance in Nigeria. Based on the interview with 32 staffs, this study identifies the effect of culture that shapes corporate governance and they include abuse of power by top management, weak legal framework, poor recruitment and ineffective control. Although having efficient corporate governance is worth pursuing, this depends on the power of top management, the strength of internal control procedures and the legal framework put in place by management.