Graduate School of International Studies Ajou University
What is corporate governance and why corporate governance? Corporate governance is defined as an internal system encompassing policies, processes and people, which serve the needs of shareholders and other stakeholders by directing and controlling management activities with good business savvy, objectivity, accountability and integrity.
Wherever power is exercised to direct, control and regulate activities that affect people’s interests there is the need for good governance. Corporate governance in Nigeria is concerned with the processes by which corporate entities, particularly public liability companies, are directed and controlled. As such, it is the exercise of power over the enterprise direction, the supervision and control of executive actions, the great concern for the effects of the enterprise on other parties and especially the environment, the acceptance of a fiducial duty to be accountable and the self-regulation of the enterprise within the statutes and jurisdiction of Federal Republic. (Yakasai, G. A; pp 238).
Why Corporate Governance matters:
Adding value: Good corporate governance promotes sustainable private sector investment in developing countries. Sound corporate governance practices are essential building blocks for fostering a good investment climate. It helps creditors and investors make informed decisions, help build confidence in the company and reduce capital costs. Wherever there is a weak corporate governance environment such as in the less developed countries (LDCs), economic growth will be hampered resulting in value loss; and this has been the case in Nigeria. Nigeria’s Company law, Companies and Allied Matters Act, Bank and other Financial Institutions Act, and the SEC’s listing requirements, incorporate many sound corporate governance features. However, past banking and corporate failures point to major weaknesses in corporate governance. Key problems could be inadequate enforcement of statutory standards, a lack of sanctions for wrong doing and a lukewarm media response to such malpractices.
Developing capital markets: Improving corporate governance contributes to the development of the public and private capital markets. Poor standards of governance, particularly in the area of transparency and disclosure have been a major factor behind instability in the financial markets across the globe. This was seen in the case of the East Asian financial crisis of 1997, where so-called “crony-capitalism” combined with macroeconomic imbalances to interrupt decades of outstanding economic growth. Most recently, poor corporate governance contributed to the spread of corruption and fraud that led to the dramatic corporate failures in US and Western Europe.
In studying the effects of the media on corporate governance by focusing on Cadbury scandal, the study finds that the Nigerian print media lacks investigative journalism and the corrupt terrain in the country does not help matters. The study also finds that the Nigerian media has the much needed freedom (in comparison with other African countries), but lack adequate funding. In addition, it was discovered that the influence of the Media on the government and organizations increases during election period in Nigeria. An effective media strategy can actually leverage media attention to highlight and redress corporate governance violations in developing countries.
Keywords: corporate governance; Nigeria; print media; impact; impact measurement; governance; democracy