ammended article on corporate governance

8/13/2019 Ammended Article on Corporate Governance

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CORPORATE GOVERNANCE AND THE

PERFORMANCE OF SMEs IN NIGERIA

CO-AUTHORED BY

RAPHAEL SUNDAY ETIMDEPARTMENT OF ACCOUNTING

FACULTY OF BUSINESS ADMINISTRATION

UNIVERSITY OF UYO, UYO

08035048148

[email protected]

IWORA GODFFREYAGARAFIACE AD ACCOUT! DE"ART#ET$

GEO#ETRIC "OWER %TD$ ABU&A

i'ora(o)*[email protected]

+,+/0121+

ABSTRACTThe study on corporate governance and SMEs performance in Nigeria eulogices the dimensions and empirical

evidences of neglect of good corporate governance in Nigeria business environment. There has been a growing

concern about the neglect of corporate governance in the management of small and medium scale operators inNigeria. Diverse definitions have been given to corporate governance, but !"N #$%%&' defines corporate

governance as the system by which companies are directed and managed in the best interest of the owners and

investors. This study critically investigates the dimensions of corporate governance in Small and Medium scale

operations in Nigeria and further e(plores the empirical evidences of failures and compliance to corporate

governance in Nigeria. Theoretically, the study buttresses the relationship between structure and firms

performance vis)*)vis corporate governance to the service agency theory. Several aspects of global based

evidences and dimensions of conse+uences of corporate governance are reviewed. mplications and

recommendations were based on the empirical findings.

KEYWORDS

I!"#$%&'(#s, C)$")$% *)(#$+%+# %+- SMEs P#$.)$!%+#
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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I+&$)-/&')+

The 3ee) to operate a 456i3e66 e**ecti7ely a3) e**icie3tly i3 or)er to ma8imi9e ret5r36 o3

i37e6tme3t a3) *53ctio3 i3 the 4e6t i3tere6t o* the 6ociety a3) all 6ta:ehol)er6 ca33ot 4e o7er-

empha6i9e). Corporate (o7er3a3ce aim6 to achie7e ;56t that. The i665e6 o* corporate

(o7er3a3ce a3) po7erty alle7iatio3 ha7e a665me) the *ro3t 45r3er a3) i3)ee) attracte) a

(oo) )eal o* p54lic i3tere6t i3 rece3t time6 )5e to the li3: 4et'ee3 (oo) (o7er3a3ce$ po7erty

alle7iatio3 a3) h5ma3 )e7elopme3t. Go7er3a3ce a3) re6o5rce6 ma3a(eme3t i3 654-!ahara3

A*rica3 ha7e 4ecome o3e o* the :ey challe3(e6 o* the re(io3al eco3omie6. For i36ta3ce$ the

e6ta4li6hme3t o* (o7er3me3t i36tit5tio36 i3 i(eria$ 65ch a6 the B5rea5 o* "54lic E3terpri6e6


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the per*orma3ce o* !#E6 a)7er6ely


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corporate (o7er3a3ce to the 65r7i7al o* the macro eco3omy. Accor)i3( to Oyi;e)e a3)

!oyi4o


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per6pecti7e co36i)er6 corporate (o7er3a3ce a6 the heart o* 4oth a mar:et eco3omy a3) a

)emocratic propo3e3t o* the 4roa)er per6pecti7e. The e8ample6 o* the re65lta3t pro4lem6 o*

pri7ati9atio3 cr56a)e that ha6 4ee3 6'eepi3( thro5(h )e7elopi3( co53tie6 6i3ce the 0/+6

a3) the tra36itio3 eco3omie6 o* the *ormer comm53i6t co53trie6 i3 the 0+$ that i665e6 o*

i36tit5tio3al$ le(al a3) capacity 45il)i3( a6 'ell a6 the r5le o* la' are the 7ery heart o*

corporate (o7er3a3ce$ Oyi;e)e a3) !oyi4o


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6tr5ct5re6 4y 'hich e3terpri6e6 are )irecte) a3) ma3a(e) i3 the 4e6t i3tere6t o* the o'3er6

a3) i37e6tor6.

BASIC PRINCIPLES OF CORPORATE GOVERNANCE

ICA


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"%EA!E !TATE THE DATE AD O%U#E OF THE RE"ORT

The co3cept o* !#E6 7arie6 amo3( co53trie6 a3) i3)56trial (ro5p6 O35oha


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Corporate (o7er3a3ce ha6 a665me) (reater 6i(3i*ica3ce *ollo'i3( hi(h pro*ile

corporate 6ca3)al6 a3) the co36e>5e3tial lo66e6 i3 the America3$ E5ropea3 a3) other

eco3omie6. Thi6 ha6 *oc56e) the mi3)6 o* (o7er3me3t6$ re(5lator6$ compa3ie6 a3) the

(e3eral p54lic o3 'ea:3e66e6 i3 corporate (o7er3a3ce practice6 a3) the 3ee) to a))re66

them. Fa:i


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!imilarly$ Fa:i


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the i3te(rity a3) tra36pare3cy o* operatio36 a3) reporti3($ i36pectio3 o* 4oo:6 a3) recor)6 a6

a mea65re to mo3itor the acti7itie6 o* the *irm


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companys strategic aims, providing the leadership to put them into effect,

supervising the management of the business and reporting to shareholders on

their stewardship. The boards actions are subect to laws, regulations, and the

shareholders in general meeting

ICA


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pro7i)e6 a 6tr5ct5re thro5(h 'hich the o4;ecti7e6 a3) the per*orma3ce o* a corporatio3 are

)etermi3e) a3) mo3itore). Goo) corporate (o7er3a3ce co3tri45te6 to

i. The e**icie3t mo4ili9atio3 a3) allocatio3 o* capital

ii. The e**icie3t mo3itori3( o* corporate a66et6

iii. Impro7e) 3atio3al eco3omic per*orma3ce.

i7. Goo) 456i3e66 ethical practice6

7. "roper recor) :eepi3( a3) acco53ta4ility

7i. Co3*i)e3ce o* employee6 a3) the 'o5l) 4e i37e6tor$ (5ara3tee)

REVIEW OF EVIDENCE OF POOR GOVERNANCE STRUCTURE IN ENTERPRISES

Ca6e6 o* *ail5re o* 6mall a3) me)i5m 6cale e3terpri6e a4o53) i3 ma3a(eme3t a3)

acco53ti3( literat5re. For i36ta3ce$ the propo6itio3 4y the ICA


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The e**ect6 are ma3i*e6te) 'he3 the price6 o* 6hare6 3o6e-)i7e) 'hich co36e>5e3tly re65lte)

i3 )epreciatio3 o* the aira a3) it6 p5rcha6i3( po'er. The reporte) ca6e6 o* *ail5re o*

corporate (o7er3a3ce i3 i(eria al6o impact a)7er6ely o3 the o* i37e6tor6 co3*i)e3ce i3 the

corporatio36. I3 mo6t i36ta3ce6$ the 6hare6 o* 4a3:6$ the *ail5re6 o* the capital mar:et a3) the

cre)i4ility o* compa3ie6 'ere 6ha:e3 )eeply$ 'hile 6ome i(eria 4a3:6 'ere acc56e) o*

'i3)o' - )re66i3( acco53t6 a3) ret5r36$ (ra3ti3( 53collaterali9e) a3) 3o3-per*ormi3( loa36

e7e3 to-pho3y compa3ie6 a3) a66ociate6.

G2)%2 s/$(# ). )$")$% *)(#$+%+# .%'2/$#s

!L Compa3ie6 Co53try L locatio3 Year6 Ca56e6 o* corporate (o7er3a3ce *ail5re0 ero8 U3ite) !tate o* America 0+ o i3ter3al co3trol

!harp practice6

? Tyco U3ite) !tate o* America 0, Corr5ptio3 a3) em4e99leme3t o* *53)6

%ac: o* i3ter3al co3trol

Improper #emora3)5m o*

U3)er6ta3)i3(


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IFAC


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a3) 6er7ice6 to c56tomer6. I3 a))itio3$ *irm6 6ho5l) comply 'ith the la'6 o* the la3)

rem53erate employee6 *airly i3 or)er to mi3imi9e *ra5)5le3t practice6$ a3) promote 65ch

corporate i)eal6 a6 'o5l) e3a4le the or(a3i9atio3 to *53ctio3 e**ecti7ely a3) e**icie3tly. For

o3ly the3 'o5l) i(eria$ a3) other )e7elopi3( eco3omie6$ recor) pro(re66 a3) eco3omic

6ta4ility.

R#.#$#+#s

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"re66 %imite)

?. A:i3yele$ A.


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0. #5ller$ !.

ammended article on corporate governance

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