SHAREHOLDERS AS WATCHDOGS OF CORPORATE GOVERNANCE IN NIGERIAN PUBLIC COMPANIES

Abstract

Shareholders own large corporations where, typically, there is a separation between management/control of the company’s affairs and ownership. This reality throws up corporate governance concerns, a key part of which is how shareholders, as principals, could monitor the activities of senior executives and boards, as their agents, towards guaranteeing that there is constructive convergence in their interests in pursuance of achieving organisational and sustainability goals. The seeming helplessness of shareholders in carrying out this task is all too well known. The purpose of this piece is to contribute to the body of literature which demonstrates that this need not be the case. Shareholders’ activism is a choice. There exists tremendous comfort in our statute and case law for shareholders to draw upon in taking deliberate steps to monitor and remediate misfeasance/wrongs committed by their senior executive agents. The challenge for all is to continue the advocacy for enhanced shareholder knowledge of their critical role in the process and the dangers of inactivity. On the reverse side, senior executives need to take on board the value of open and constructive communications with shareholders and internalize the truism that carrying them along is in their collective long-term interests. The ultimate beneficiary of ingrained monitoring of corporate governance is the sustainability and going concern status of the companies, that shareholders invest in.