Regulatory Multiplicity and Conflict: Towards a Combined Code on Corporate Governance in Nigeria


Given the multiplicity of codes designed to regulate different stakeholders in terms of promoting good corporate governance, this paper examines areas of conflicts among the various codes and the associated implications for corporate governance practices and regulatory compliances by public-listed Nigerian firms. Using the conflict-signalling theory for developing the conceptual framework, this study examines the proliferation of codes in Nigeria, through a mixed method approach to provide an exploratory account of the implications of corporate governance regulatory multiplicity. Evidence suggests the presence of conflict among the various codes which contributes to reduced compliance by firms and ineffective enforceability by regulatory agencies, which both impede good corporate governance in Nigeria. The findings advance conflict-signalling theory as an important framework for understanding the implications of the conflicts arising from the multiplicity of codes.

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  1. 1.

    There is multiplicity of corporate governance codes in Nigeria. These are the SEC code of Corporate Governance developed in 2003 later revised in 2011 (the SEC code), the 2006 code of Corporate Governance for Banks in Nigeria Post Consolidation (CBN code), the 2007 SEC Code of Conduct for Shareholders’ Associations (SEC code for Shareholders), the 2008 Pension Commission of Nigeria’s Code of Corporate Governance for Licensed Pension Operators (PENCOM code), and the 2009 National Insurance Commission’s Code of Good Corporate Governance for the Insurance industry (NAICOM code). Banks are examples of intertwined stakeholders as they have to comply with the SEC and CBN codes. The SEC code which applies to all companies is voluntary, while the 3 industry-specific codes (CBN, NAICOM and PENCOM) are mandatory.

  2. 2.

    This incentive to provide information acts a boost to the market which leads to economic benefits. Also, signalling can be used by managers as an incentive to distinguish themselves from others using information disclosures as a tool. Therefore, compliance to codes may have economic benefits to the firm, based on the level of disclosure through reporting instruments such as the annual report and financial statements. Seeking to understand companies’ attitudes towards compliance with codes, we focus on signalling as a complimentary tool with conflict theory (that is conflict-signal) to explain these behaviours of non-compliance from managers and the lack of enforceability from regulators as problems arising from multiplicity of codes.

  3. 3.

    For example, one of the disadvantages of the multiplicity of corporate governance codes in Nigeria relates to the resolution of conflicts between the SEC code and the three industry-specific codes (Ofo 2013). These conflicts can be observed in terms of companies’ compliance and disclosure. For example, the 2011 SEC code appears unsure and uncertain in term of applicability (Adekoya 2011). Also, the SEC Code does not state categorically if it is superior over the three industry codes or not (Ofo 2013) but only recommends that in circumstances of clash between the various codes, the code that is most stringent on the issues remains superior. This is, however, confusing to companies and managers (Demaki 2011; Ofo 2013).

  4. 4.

    These documents are the SEC Code of Corporate Governance of 2003 and 2011, the CBN Code of Corporate Governance for Banks in Nigeria Post Consolidation 2006, the SEC Code for Shareholders 2007, the Pension Commission of Nigeria’s Code of Corporate Governance for Licensed Pension Operators 2009 and the National Insurance Commission’s Code of good corporate governance for the Insurance Industry 2008.

  5. 5.

    The spread in the surveys helped to cover geographically wide samples. This allowed participants (PLCs) who are widely dispersed to be accessed and included in the sample. In particular, Nigeria is made up of 36 states with these companies widely dispersed across the states. This necessitated the use of the survey method which enabled that all the states and companies were covered.

  6. 6.

    Although the questionnaires were addressed to the Chief Executive Officers (CEOs), accompanying telephone calls and email reminders were sent to companies emphasising that any top ranking manager could complete the questionnaires if the CEO was unavailable or unable to complete. As a result, the views represented in this paper are those of top management teams which are very critical and significant to understand the regulatory multiplicity of codes and their implications. See the introductory letter to the questionnaire in Appendix 1.

  7. 7.

    The NSE transactions are regulated by the NSE and the SEC which administers the Investment and Securities Act of 1999. All PLCs submit their audited annual financial statements to the NSE, which is a mandatory requirement by NSE and SEC. In other words, NSE collates historical information and extracts from balance sheets, profit and loss accounts, and financial ratios of PLCs. Similarly, the NSE’s fact book publishes both the management and financial information of PLCs such as directorship shareholdings, board of directors’ characteristics and financial statements. The company reports are prepared according to SAS 30 and IAS 34 guidelines. The SAS 30 and IAS 34 are financial reporting standards and part of the SEC rule. This involves the publication of the quarterly annual report in one national daily newspaper as a sign of transparency to investors. The NSE transactions are published and documented in NSE Fact book annually. For more discussion on the Nigerian corporate governance system including the nature of its companies, capital markets and institutions, equity ownership structure, board composition and how they have evolved (see: Ahunwan 2002; Adegbite 2012; Adegbite et al. 2012; Okike 2007; Yakasai 2001; Amao and Amaeshi 2008; Tricker 1996).

  8. 8.

    The valid responses represent the completed questionnaires, while the invalid responses are part of the discarded questionnaires. By this we mean responses that are free from mistakes and errors such as miss-spelling or incomplete statements.

  9. 9.

    They were 224 PLCs in 2010 and all were sent questionnaires. 102 completed questionnaires were returned and collected. A response rate of 45.5 % (that is 102 as a percentage of 224) was thus achieved. These companies constituted the sampling frame which, according to Creswell (2003), explains the objective list of the population size. In order to ensure that the result from the sample survey was consistent with the population, and in an attempt to improve generalisation, a large sample size and high response rate of completed questionnaire was aimed at.

  10. 10.

    The criteria for selecting the interviewees were based on top managers who are accessible and who have and are willing to provide such relevant information. Out of the 52 interviewees selected only 18 interviewees accepted to grant interviews.

  11. 11.

    Focus group participants were selected following initial conversations to ensure that they had sufficient knowledge on the topic of discussion and that they had enough interest to discuss the topic. This provided us with the opportunity to learn a little about each participant before talking to them in the focus group. It also provides us with an opportunity to ensure that they understood the goals of the study and are knowledgeable about the codes and its implementations. This also provided the researcher and participants the opportunity to be comfortable with one another prior to focus group discussions.

  12. 12.

    A fair and balanced approach was adopted for the focus group to ensure diversity and fair representation of participants from different backgrounds and roles. This was to guarantee that the perceptions, opinions, beliefs, attitudes and comments of participants were from different perspectives. For details of respondents in focus groups, see Appendix 3. A tape recorder was used to record the two sessions and each of them took an average of 80 min. The analysis of focus group data presents both challenges and opportunities when compared to interview and survey data, particularly it presented the opportunity to observe interactions and how discussions unfold among the various respondents.

  13. 13.

    The FRCN Act established the FRCN and was formerly known as the Nigerian Accounting Standards Board (NASB) which was established in 1982 as a private sector initiative under the aegis of the Institute of Chartered Accountants of Nigeria (ICAN). The FRCN Act 2011 created the stable regulatory environment in the corporate sector. This FRCN was covered by the statutory regulatory legislation and also vested with power and responsibility of ensuring companies maintains good corporate governance practices (Ofo 2010, 2013). However, it is noteworthy to mention that the FRCN is still at the early stages of formation (Obazee 2013). According to Okobi (2013), Nigeria is moving in the right direction with the FRCN Act and the IFRS adoption. Currently, the FRC is also expected to harmonise the various codes into a single code of corporate governance in Nigeria.

  14. 14.

    The agency theory argues against this conflict also by stipulating that the interest of managers should be separated from self and aligned to that of owners (Berle and Means 1932; Jensen and Meckling 1976; Jensen 1993).


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This research study received funding from the British Academy, for which the authors are grateful.

Author information

Correspondence to Emmanuel Adegbite.


Appendix 1: Questionnaire

Cover Letter and Survey Questionnaire

Appendix 2: Coding of Interviewees Response

The coding of interviewees from the four (4) PLCs was done to protect the identity of those interviewed as agreed prior to commencement of the exercise as shown in the covering letter sent to them. The codes assigned to the interviewees are related to the names of the companies, the Industrial and General Insurance (IGI) Company are assigned the prefix ‘IG’, ‘E’ for ExxonMobil, ‘W’ for Wema Bank and ‘Z’ for Zenith Bank (Table 4).

Table 4 Summaries of field interviews

Appendix 3: Focus Group

See Table 5.

Table 5 General information of respondent background/function of Number of experts

Appendix 4

See Table 6.

Table 6 Profiles of respondents in survey and their relationship with interviewees

Appendix 5

See Table 7.

Table 7 Profiles of respondents in survey and their relationship with interviewees continues

Appendix 6

See Table 8.

Table 8 The breakdown of survey questionnaires

Appendix 7

See Table 9.

Table 9 Lack of enforcement

Appendix 8

See Table 10.

Table 10 Focus group guide for questions

Appendix 9

See Table 11.

Table 11 .

Appendix 10

See Table 12.

Table 12 Profiles of participants in focus group

Appendix 11

See Table 13.

Table 13 Abbreviations

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Osemeke, L., Adegbite, E. Regulatory Multiplicity and Conflict: Towards a Combined Code on Corporate Governance in Nigeria. J Bus Ethics 133, 431–451 (2016) doi:10.1007/s10551-014-2405-3

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  • Corporate governance
  • Multiplicity
  • Code of corporate governance
  • Developing countries
  • Nigeria
  • Conflict-signalling theory