Given the diverse nature of the Nigerian society and the tension associated with political contestations, particularly elective positions at various levels of government, some power sharing frameworks evolved in both formal and informal contexts. The 'Federal Character Principle' for instance, which is a constitutional provision that requires the sharing of major political and bureaucratic positions among the diverse people of Nigeria is meant to ensure fair representation, equitable distribution of political incentives and sense of belonging. This principle is also internalized by the major political parties in Nigeria in their candidates’ selection procedure and indeed by the legislature in determining candidates for legislative leadership positions. Thus using the National Assembly of Nigeria from 1999-2011, the paper examined the extent to which formal and informal power sharing arrangements affects democratic governance in the country. The paper relied on secondary sources of data, which include official documents such as the Constitution of the Federal Republic of Nigeria, constitutions of various political parties, newspaper and bulletins and some extant literature. Theoretically, Lijphart’s (1968; 1977; and 1990) consociational model of Proportional Representation (PR) provided the guide to understanding the power sharing arrangement in Nigeria’s democracy and particularly the informal arrangement within the National Assembly. This theoretical stance, though contradicts the broader theory of legislative institutionalization, is seen as an effective strategy for dousing tensions, curtailing upheavals and ensuring mutual trust among the diverse groups of Nigeria for democratic stability. The paper, however, argues that the informal power sharing arrangement in the Nigeria’s National Assembly undermines its autonomy, complexity and the principle of universal procedure of conducting legislative business. Essentially, the power sharing arrangement affects the stability of legislative leadership which is central to legislative autonomy and its institutionalization as well. The paper concludes that while the National Assembly in Nigeria is unlikely to institutionalize conventionally, the fragile nature of the informal arrangements of power sharing may also be source of tension and conflict once it is obstructed.