ABSTRACT
Research
into corporate governance in Nigerian Bank was born out of necessity to
investigate the frequent collapse of some banks ever since the post- independence
period. Bank failure is so disturbing because it sits at the centre of the
economy. Upon further enquiry, this study arrived at the conclusion that
central to the causes of bank failure is the poor management in institutions.
The first chapter succinctly discussed the issues of bank failure and faults,
centralization of management, misreporting, insider abuses and fraud, violation
and non-compliance of internal controls put in place, etc. Causes of bank
failures is the locus standi of the discussion of corporate governance in
chapter one. Several definition of corporate governance coming from different
schools of thought was attempted, analyzed and common position identified.
Summarily, corporate governance was defined as the way and manner corporate
organizations are directed and controlled by the board for the interest of the
stakeholders. Wealth distributions to the stakeholders which is one of the
poignant issues corporate governance addressed was central to this study.
Review of literature historically traced back bank distress in Nigeria from pre
-independence to date. Reasons for the recorded failures were also identified.
Aims, principles and provisions of corporate governance were discussed in
chapter two. Legal perspective was given to the study by the highlighting on
the provisions of OECD, Bank for international settlements, peterside’s
Committee, Bankers Committee, King’s reports on corporate governance. The
procedures adopted in data generations, data collection, measurement criteria,
analysis and interpretations were highlighted in chapter three. The empirical
approach adopted in the research gave the work a scientific outlook. Sufficient
data generated were tabulated so as to aid analysis. Pictorial analytic tools
–graphs were employed in analyzing the data. In data analysis, a comparative
study of the values given to various stakeholders of Banks was done so as to
determine their fairness or otherwise. Before arriving at a result data of
various companies under review as contained in Value added statement in the
past five years were carefully spooled and analyzed. The analyzed data
presented in graph simplified the analysis. Conclusively, the study criticized
the returns given to shareholders of banks and recommended a comparative review.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The
increasing number of high profile corporate failures around the world has
sparked off a lot of enquiry as to the reasons why well-established and
respected companies failed. Corporate failure today is a global issue. On the
international scence we saw the overlaps of large companies like Enron,
Worldcom, Rank, Xerox, Rarmalat, Bank of Credit and Commerce International
(BCCI) and large-scale crisis that rocked the Asian financial institutions. In
Nigeria, corporate failure is very rampant in the financial services sector
some years back and even at present.
Cases of corporate debacle
abound in the death of Abacus Merchant Bank Nigeria Limited, Royal Merchant
Bank Limited, Rims Merchant Bank Limited, Financial Merchant Bank Nigeria
Limited, Progress Bank Plc to mention but a few (Al-Faki;2006). Soludo: 2005
hinted that by 1998 a total of 26 banks have been liquidated and at the time of
consolidation in 2005, eleven banks were already dead literally. Outside the
banking institution, creative accounts of African petroleum where its concealed
debts in excess of N20 billion, over valuation of shares of involving Bonkolans
securities and others are signals of impending doom for these companies. What
then is the cause of corporate failure in local and international, listed and
unlisted, quoted and unquoted, public and private companies?
John
Clutterback in Al-Faki (2006) highlighted that companies that failed shares
some common characteristics and they are: -
v
Leadership
of the company is vested in an individual who combines the office of chairman
and chief executive with domineering tendency.
v
Persistent
violation and non-compliance with internal control of the company by the chief
executive.
v
Optimistic
or even distorted rather than prudential financing reporting.
v
Minimal
disclosure in the accounts of the company.
It
is the combination of these factors that undermine the ability of companies to
withstand economic downturns turns leading to a collapse.
In
the Nigerian Banking Industry, issues such as lack of probity, transparency,
integrity and accountability, inflation of balance sheet with unearned income,
weak capital base, unskilled and inefficient management also contributed to
death of many banks. Uche, 2001 identified the reasons of early indigenous
banks failures as mismanagement and accounting incompetence. These are the
issues today’s legislation need to combat with since yester years’ provision
seemed to be adequate.
What
then is adequacy of bank legislation and controlling and regulating the banking
practices in the industry? The question is pertinent, because in spite of the
existing legislations, a number of failures and distresses have been recorded
in the industry. In an attempt to design codes, that will be appropriate to
quell these irregularities, a global phenomenon termed “Corporate Governance”
came into existence. Today, it has become a contemporary issue, which has
dominated the interest of all business, legal and government circles worldwide.
In the
Nigerian
scene, the provisions in the code of Corporate Governance was designed to
augment the provisions of Company and Allied Matters Act 1990 (CAMA), Bank and
other Financial Institution Act (BOFID) 2004, Failed banks (Recovery of Debts)
and financial malpractices in Bank Act 2004, Nigeria Deposit Insurance
Corporation Act, 2006, Money Laundering (prohibition) Act 2004, Economic and
Financial Crimes Commission (Establishment) Act 2004, Prudential Guidelines and
other relevant banking codes and prudential guidelines for Deposit Money Banks
in Nigeria.(2010)....
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Item Type: Postgraduate Material | Attribute: 112 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
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