CORPORATE GOVERNANCE REGULATION AND CONTROL FRAUD IN NIGERIAN BANKS

Abstract

The 2009 banking crisis in Nigeria awakened the country on the need for effective corporate governance regulation. In a bid to prevent future banking crisis in the country, this thesis examines control fraud in the 2009 banking crisis using the first five banks involved as a case study. The research addresses three major areas of concern: first, it investigates the fraudulent activities of the banks’ CEOs in the periods leading to the crisis; second, it explores the involvement of other corporate actors in the banking crisis; lastly, it examines how corporate governance regulation can be improved to reduce the likelihood of future control fraud in the banking sector.

The research adopts a socio-legal method that links corporate governance regulations pre and post banking crisis to the role of corporate actors including CEO’s, auditors, shareholders and Regulators in corporate governance. The research explores corporate governance as a driver of control fraud in Nigerian banks. The research suggests that prevention of control fraud is not in itself determined by provision of adequate corporate governance regulation but also include a number of enforcement mechanisms and contribution of corporate participants, a totality of which could help prevent future control frauds in Nigerian banks.

The research contributes to theory, practice and policy. First, it integrates and enhances appropriate literature and knowledge on corporate governance regulation in Nigerian banks. Also, by using the concept of control fraud to understand the banking crisis of 2009; the research unfolds a relatively new type of fraud perpetrated by CEOs in collaboration with other corporate individuals. This is the first study of its kind in Nigeria and will be useful for future studies to adopt in conducting similar research.
The research also influences regulators and policy makers by providing a set of recommendations for each actor in corporate governance which can be incorporated into law in the fight against future control frauds in Nigerian banks.