CORPORATE GOVERNANCE AND THE FINANCIAL PERFORMANCE OF PENSION FUND ADMINISTRATORS IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Corporate governance is the administrative arrangement whereby a nation or organization is segmented or broken into administrative units with well-defined roles stated in the constitution as the laws of the country or statute of the organization. The Nigeria nation started as a unit through the emergence of the missionaries and the British traders and its corporate arrangement started with the creation of southern protectorate which metamorphosed into a nation with the amalgamation of the two protectorates in 1914 by Lord Lugard was the governor general appointed by Britain (Esther, 2009). The corporate arrangement led to the introduction of Regional Government whereby Nigeria was divided into three regions namely: the west with headquarters at Ibadan, the East with headquarters at Enugu, and the North with headquarters at Kaduna. The regions increased to four with the creation of Midwest region in 1963 with the headquarters at Benin (Federal Republic of Nigeria constitution of 1990). The federated unit of Nigeria was changed from „region‟to state in 1967 when Gowon Administration divided Nigeria into 12 administrative units called States. It then grew to 19 state structure and finally 36 states, and the Federal Capital Territory Abuja at present. Corporate governance also refers to issues such as transparency, resolution of conflicts and the overall way in which the business in question is run. Governance also includes accountability and anti-corruption measures put in place by various operators or components (Musalem and Palacious, 2004). There cannot be governance in pension fund administration when pension contributors‟ funds are used to meet objectives other than retirement income objective. Corporate governance would be absent if workers‟ pension contributions are used as captive source of finance or lost due to corruption and mismanagement.