An Exploratory Study: To What Extent Do Companies Listed on the Nigerian Stock Exchange Comply with Corporate Governance and Risk Management Principles?

The main objective of this study is to evaluate the degree to which companies listed on the Nigerian Stock Exchange (NSE) comply with the principles of corporate governance and risk management, based on the premise that NSE-listed company directors can “[ensure] that corporate actions, agents and assets are aimed at achieving the corporate objective because of their awareness of the principles” (p. 28). Using the Corporate Affairs Commission survey form, closed-ended questionnaires and secondary data, the survey instrument was administered to 35 companies selected by random sampling (out of a total population of 113), of which 26 were obtained. To test the degree of the respondents’ knowledge of, and conformity with, the values, the responses were statistically analysed. To assess the relationship between the degree of knowledge of, and extent of conformity with, the concepts, the Pearson correlation coefficient was used. The research results show that while there is a high level of awareness among NSE-listed companies of the principles, a ‘negligible/scant positive’ correlation[2] (p.163) has been identified between the level of awareness of these principles and the degree to which the companies comply. An consequence of this scenario among the NSE-listed businesses for managerial practise is that more corporate resources need to be mobilised to improve the enforcement role in these businesses. In order to improve the enforcement role in NSE-listed companies, stronger measures/more positive steps are needed to provide fair assurance that corporate acts, agents and assets are deployed[1] The directors of these businesses would contribute to the achievement of the corporate targets set by shareholders.

Author (s) Details

Dr. Michael Agamah
Company Secretarial & Legal Services Division, Keystone Bank Limited, Keystone Bank Crescent, Off Adeyemo Alakija Street, Victoria Island, Lagos, Nigeria.

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