CORPORATE GOVERNANCE IN THE NIGERIAN BANKING INDUSTRY.

CORPORATE GOVERNANCE IN THE NIGERIAN BANKING INDUSTRY.

CHAPTER ONE

INTRODUCTION

BACKGROUND TO THE STUDY

 A series of events over the last twenty years have brought corporate governance issues to the tope of concerns for both the international financial institutions and international business institutions and international business community. Some business failures such as the infamous Bank Credit and Commerce International (BCCI) Scandal heightened the demand for improved corporate governance, especially in corporations operating in the developed countries. More recently, high profile scandals, financial crises and/or institutional failures in Russia, Asia and the United States have brought corporate governance issues to the fore in developing countries and emerging markets. 

These incidents illustrate that the lack of corporate governance enables insiders, whether they be company managers, company directors or public officials, to ransack companies and/or public (offers at the expense of shareholders, creditors and other stakeholders (employees, suppliers, the general public, etc). 

According to Hermes, corporate governance activities is the improvement of the performance of the companies in which it invests on behalf and for the benefit of its clients. 
Also, the term corporate governance means decisions-making and control procedures in respect of company’s relations with wide range of stakeholders or company’s compliance with the provisions of best practice codes. 

McKinsey’s survey (2000) (updated 2002) surveyed over 200 institutional investors and found that 80% of the respondents paid their premium for well governed companies. In 1975, the Basel Committee on Banking Supervision was established by the Central Bank Governors of ten group of countries to issue guidance on good governance on banks operation. 
In Nigeria, the financial services sector in the 1990s witnessed a turmoil arising from widespread abuses of corporate governance principles. This led to the emergence of the failed banks. Tribunals in the 1990s and eventually the consolidation in the banking industry in the early 2000s. This research work is an attempt to look at corporate governance in the banking industry. 

STATEMENT OF THE RESEARCH PROBLEM 

For proper focus of the study, corporate governance in the banking industry, will be aimed at finding solutions to the problems faced by banks and the public.

Also, the efforts of government to control, introduce a more effects the development, policies and implementation. 

Another area of the study includes the efforts of government to check the excess of banks and how to stabilize them. Against this backdrop, we are going to be faced with the following research problems in the course of this research work.

 Will corporate governance improve professionalism in the banking industry?

 Does the effectiveness of corporate governance in the banking industry depend on strong government policies and implementation?

What are the inhibiting factors that hindered the development of corporate governance in the banking industry?

 Is it not possible for banks to circumvent the government in the banking?