Implementation of Corporate Governance in the Nigerian Banking Industry

ACKNOWLEDGEMENT

First of all, it would give me great gratification to show my thankfulness to my lecturer, for his remarks, propositions, patience and understanding. It would also be an act of admiration to express gratitude to my parents, my father, my mother, my brother and my sister for their never-ending support in my life and helping me in making all the important decisions of my life. I would also like to take the opportunity to demonstrate appreciation to my co-workers for their expert cooperation and team work on each and every instance. I would also like to be appreciative to the Department, managers of the university, instructors and students who have provided me their support in one way or the other, throughout this research.

DECLARATION

I declare that the content presented in this thesis/dissertation is, in my opinion and understanding, original and has not been presented for academic evaluation in the past, either partly or completely, for an academic degree at this educational organization or somewhere else. I would also like to acknowledge that I have studied and understood the prerequisites, principles, processes and guidelines of the University on the subject of the higher academic degree research award and to my dissertation. I would also like to declare that I have abided by the University's principles, prerequisites, processes and guidelines.

Signed __________________ Date _________________

ABSTRACT

Nigeria is the second largest economy of Africa, after South Africa, but the country has failed consistently to realize its potential. The late president of Nigeria, Yar' Adua, had begun to reform major key parts of the economy after the success of military regimes in the country by an elected one. The two key industries that were the center of this reformation include the country's banking industry and the oil industry. Following this reformation, the banking industry of Nigeria was consolidated in the year 2005, from 89 banks to 24 banks. Moreover, an obligatory code was issued for the industry in the year 2006 which is the Code of Corporate Governance. Other major sectors of the Nigerian economy continued to follow the 2003 voluntary Code which was developed by the Securities and Exchange Commission of Nigeria. The main aim of this 2006 Banking Code was to target numerous weaknesses that were prevailing in the Nigerian banking industry, and to eliminate these weaknesses to the lowest possible level in order to ensure the implementation of good corporate governance. Moreover, recent financial crisis that happened globally, crisis in Asian industries, and the worst experiences of banks failure and distress, have resulted in suggesting the need to review and to take stock of the corporate governance capacity of Nigerian banking industry. Thus, the aim of this piece of study is to examine if any divergence exists between the code of corporate governance in Nigerian banks and its compliance, and to find out how the implementation of the corporate governance in the Nigerian banking industry can curtail the effects of the recent global financial crisis and avert the ...