The old four chapters in the thesis outlined the chief grounds to analyze corporate administration in the Bankss in Nigeria. Chapter one deals with the debut to the survey, aims and importance of the survey. Chapter two reviewed the literature relevant to the survey of corporate administration of Bankss every bit good as corporate administration in Nigeria and United Kingdom. Methodology and methods was looked into in chapter three, giving history of the pick of research paradigm adopted in this research. Consequence of the content analysis was discussed in chapter four.The chapter summarises the major findings of the survey which effort to reply the research inquiries presented in chapter one. The chapter is divided into three subdivisions, the findings, restriction of the survey and recommendation.
2 Major Findingss
Disclosure can be defined as“ Whole array of different signifiers of information produced by companies,Such as one-year study which includes the manager ‘s statement, the OperatingAnd Financial Review ( OFR )[ 1 ], the net income and loss history, balance sheet,hard currency flow statement and other compulsory points. It besides includes all signifiers ofVoluntary corporate communications, such as direction prognosiss, analysts ‘Presentations, and the AGM, imperativeness releases, information placed on corporateweb site and other corporate studies, such as stand-alone environmental orsocietal studies ( Healy and Palepu,2001, Jill Solomon,2007, pp.1444 )Jill Solomon posits that being of dissymmetry information consequences in troughs holding more cognition about the company in footings of company ‘s activities and fiscal place than the current or possible investors. He went farther that“ Without a construction system of revelation, and in peculiar fiscal coverageIt would be really hard for stockholders to obtain appropriate and dependableInformation on their investee companies. Such information could take toMoral jeopardy and inauspicious choice jobs. By guaranting frequent andRelevant corporate revelation, stockholders are in better place to superviseCompany direction ” .The first research inquiry raised in this thesis is the existent province of corporate administration in the Nigerian Banking sector. The consequence showed that province of corporate administration in Nigeria is still hapless province though there are some regulations and ordinances on corporate administration in the state.
For case, the codification of administration for Bankss was published by the Central Bank of Nigeria in 2006. The survey has shown that Nigerian BankssAnalysed are following with some facet of the guildline issued by the Basle commission on banking supervising in 2003 particularly, classs associating to Industry or counterparty type distribution of exposures and Geographic distribution of exposures. It was due to prudential guildline issued 1998 by Central Bank of Nigeria ( CBN ) which stipulates loan proviso demand.
The one of the failing of the codification of administration for Bankss in Nigeria was that small item was provided about the format of hazard revelation, it merely stipulates that Bankss should hold hazard direction commission. Banks in Nigeria are exposed to three types of recognition hazard, Margin loans ( exposure to stock exchange ) , oil and gas and telecommunication. Banks in Nigeria that unwrap information about recognition hazard do so voluntary. For case, first bank of Nigeria writes in its one-year study that“ First Bank of Nigeria Plc continued to do advancement against the Goalwe set for ourselves – to put the gait in corporate administration by guarantingthat the degree of hazard direction revelation in the published fiscalstatements moves towards international best Practices.
This degree ofrevelation is non at show a demand of the Nigerian AccountingStandards Board, the Central Bank of Nigeria, the Nigerian Stock Exchange,the Securities and Exchange Commission or any other regulative organic structure in thestate. However, the Board of Directors of First Bank took a voluntarydetermination to travel revelation patterns towards international criterions,borrowing from the guidelines of Pillar 3 of the New Capital Accord ( Basel II ) . ”( First bank of Nigeria Annual study 2009 page 53 )This makes it hard for investors to determine the solvency of the organisation and compare one bank from another. The research confirms the 5th study of 2009 that Bankss in Nigeria have immense bad debts that they do non unwrap in their one-year study. From the content analysis none of the Bankss in Nigeria unwrap the entire gross recognition exposure ( bad debt )The 2nd research inquiry is related to differences between corporate administration practises in the Nigerian banking sector and international corporate administration norms and rules. The consequence showed that there is a broad spread between information disclosed by Bankss in Nigeria and their foreign antagonistic portion and no uniformity in the information disclosed by Bankss in Nigeria. For case, the average figure of pages of one-year study of Nigeria Bankss was 126.4 whereas it was 304.
4 for Bankss in United Kingdom. Visual review of the one-year study released by bank in Nigeria showed that about one tierce of the one-year study contains diagrams and images of president and other managers. This makes it really hard for stockholders, investors and general populace to do informed determination about the company and it makes it hard for information to be accessible to a wide scope of users, non merely investors.
Though, the Nigeria five Bankss analysed unwrap adequate information about geographic distribution of exposures and industrial distribution of exposures, the same can non be said of other 20 Bankss in the state because these top five Bankss have subdivisions outside the state particularly in United Kingdom. They know the importance attached to disclosure of information and demand to follow with fiscal service authorization ( FSA ) guildline on recognition hazard. No bank out the five Bankss analysed disclosed its entire hazard exposure.The 3rd research inquiry involved the obstructions to the closing of the spread between the current province of corporate administration in the Nigerian banking sector and International corporate administration demand. The major obstruction to corporate administration in Nigerian banking sector is that one-year studies produced in Nigeria are based on the local accounting criterion which is out of melody with modern twenty-four hours world. It merely requires publication of quarterly pre revenue enhancement earning and no proviso on narrative revelation.
The revelation of internal control is really weak in Nigeria. There is no manner investors can cognize the procedures used by directionFor placing, measuring and pull offing the hazard the company face. It makes it hard for investors to find future tendency.
Harmonizing to Fitch study on Nigeria Bankss released on the 23rd of June, 2010.“ The present revelation demands of Nigerian accounting criterionLag behind other emerging markets which make it hard forinvestors to measure the overall degree of hazards related to local NigerianBankss, as Bankss have sought to entree the international capital markets. ”( Fitch study 2010 )They went farther to state that the fiscal market will honor companies that unwrap more information than others.“ Investors would wish to see Nigerian Bankss improve the degree of revelationin their one-year studies by showing auxiliary information over andabove the minimal accounting criterion demands ”( Fitch study 2010 )
5.3 restrictions of the survey
The most evident restriction was the clip restraint for the research. Three months is excessively short for a meaningful research on corporate administration in the Nigerian banking sector. IWould hold loved to utilize questionnaire with content analysis as a method of analysis.
I would hold loved to hold included more than 12 Bankss in my analysis but most Bankss in Nigeria merely posted figures of the one-year pre revenue enhancement net incomes on their web site ( merely to follow with the directives of Nigeria stock exchange ) . Therefore, if more clip was available, it may hold been possible to do the sample size larger and more representative. Besides, this survey did non hold the benefit of adequate literature on corporate administration ( in footings of recognition hazard ) on the Nigerian Banking sector.
5.4 drumhead and suggestion for farther survey
The research attempted to look into the existent province of corporate administration in Nigeria sector. It is clear that corporate administration in Nigeria is still in fundamental province. Many challenges sing corporate administration practises in Nigeria still remain. There is demand to pass the oversing model of Bankss in Nigeria.
The Central Bank has non been able to set up a steadfast clasp on banking supervising particularly in the country of supervising the hazard direction patterns in Bankss. The current pattern whereby CBN combines the Supervision of Bankss and other fiscal establishments with the public presentation of other Monetary/economic issue has non been really effectual. The cardinal has failed in its function to oversee Bankss in Nigeria.
In a address presented by the new Central Bank of Nigeria governor, Mr Sanuri confirmed that the bureau since 2005 has non conducted a individual scrutiny of Bankss in the state. The authorities should put up another bureau like the Financial Service Authority ( FSA ) in the United Kingdom to oversee and modulate Bankss in Nigeria.The cardinal bank of Nigeria should non blow clip in following the recommendation of Basle commission on banking supervising on recognition hazard. Without equal revelations, it will be hard for foreign investors to put in Bankss in Nigeria because everybody wants to put in an organisation that he/she is certain of acquiring return and besides, the Central Bank of Nigeria should do revelation of narrative information mandatary for Banks in Nigeria because this aid investors monitor the direction activities, thereby increasing transparence.
The National Association of Pension Fund ( NAPF ) in 2005 highlighted the importance of narrative revelation of information.“ the internal control statement provides an chance for the board to assistStockholders understand the hazard and control issues confronting the company, andTo explicate how the company maintains a model of internal control toAddress these issues and how the board has reviewed the effectivity ofThat model ” .( NAPF,2005, Jill Solomon, 2007 ) .Questions refering the importance of cultural factors in the Nigerian context ( and Africa in general ) and their relevancy to corporate administration issue still remain, as do inquiry sing market and liquidness hazard direction.
These inquiries could wholly be utile be considered for farther survey.