This paper examined the essence and effectiveness of shareholders’ democracy in Nigeria. Several materials such as Statutes, Texts, Articles, Reports, Bulletins, Case Law as well as internet materials relevant to the paper were consulted. It was observed that shareholders’ democracy otherwise known as the rule in Foss v.Harbottle or the majority rule is central to Corporate Governance and if properly effected, can serve as management’s watchdog. The majority rule states that while every member of a company has a right to take part in the decision process, he cannot insist on having his way if it is inconsistent with that of the majority. In Nigeria, the rule in Foss v.Harbottle, was firstly adopted by the Supreme Court in the celebrated case of Abubakar v. Smith, where the court was of the view that, it is only the Company that is clothed with the locus standi to sue in order to remedy a wrong that has been done to the Company and only the Company can ratify same. This Common Law rule has been statutorily recognised in S.299 of CAMA. Howbeit, strict application of this rule may lead to injustice. Thus, the majority rule has a potpourri of exceptions recognised at common law and under statutes. These exceptions include members’ direct action, derivation action, and petition for winding up the affairs of the Company on just and equitable grounds amongst others. It was also discovered that lack of activism in shareholders’ associations, illiteracy, poverty, corruption, and abuse of proxy rights are clogs to the effectiveness of shareholders’ democracy in Nigeria. The paper calls for legal and institutional reforms.
Financial Reporting Quality and Shareholders’ Wealth Maximization: Evidence from listed Companies in Nigeria (Published)
A primary objective of shareholders’ equity investment is the expected returns. The level of returns depends largely on the operational and managerial competences and effectiveness of the managers as reflected in reported financial statements. However, the quality of financial reporting in some cases appears to be questionable. Consequent to this, this study investigated the effect of financial reporting quality on shareholders’ wealth maximization. The study population consisted of 173 listed companies on the Nigerian Stock Exchange, from which a sample of 10 companies were purposively selected based on the availability of complete and relevant data for a period of 10 years (2008-2017). Data were extracted from the published financial statements of the companies selected, while descriptive and panel data regression analyses were employed. The validity and reliability of the data were anchored on external auditors’ certification of the financial statements in line with statutory requirements. The study found that Shareholders’ wealth maximization was positively affected by the financial reporting quality (AdjR2 = 0.170; F(2, 98) = 41.96; p = 0.000). The individual effects of Earnings persistence (EPES) and Earnings smoothness (ESM) on Shareholder’s wealth maximization (SHWM) were negative and statistically insignificant (β = -0.044; t(100) = -0.483 ; p = 0.629; and β = -0.038; t(100) = -0.460; p = 0.645) respectively. The study recommended that managers should exercise high level of competence and effectiveness in managing the shareholder’s equity to ensure robust returns since this is key in attracting equity investments.
Assessing the Impact of Retained Profit on Corporate Performance: Empirical Evidence from Niger Mills Company, Calabar-Nigeria (Published)
This study examined the impact of retained profit on corporate performance of Niger Mills Company Ltd Calabar-Nigeria. The research evaluated the Importance of retained profits as an alternative source of financing the activities of a corporation. Data were collected from the annual report of Niger Mills Company Ltd. Calabar and the statistical model used for data analysis was Karl Pearson product moment correlation coefficient. Findings revealed that the future earnings capacity of Niger Mills Ltd. Calabar depends on its retained profit. It was also discovered that accumulated profit retained in the business has the potential of boosting future earnings. It was therefore concluded that, corporate bodies should always retain profits in their business rather than distribute all of it to shareholders. To this end, it was recommended that corporate entities should always retained profit in their business if they have to achieve a competitive edge over their rivals. Also that policies should be instituted by corporate bodies where by a high percentage of net profit is retained in the business
Audit Committees: The Journey So Far In Nigeria (Review Completed - Accepted)
Before 1989, there was no issues of audit committee in Nigeria. In 1989 Professor Olowokure article titled a Case for Audit Committee in Nigeria was written drawing the attention of Government, Stakeholders for the use of Audit Committee in public companies in Nigeria. Hence this was captured in the CAMA 1990 as amended Section 359 (3), it then become very important in Nigeria. The importance have led to problematic issues which resulted to why the research is been carried out.
Corporate Governance, Shareholders Wealth Maximization and Tax Avoidance (Review Completed - Accepted)
Tax avoidance is a common problem among many nations I the word, especially the developing and third world countries. Most citizens see tax payment as very offensive, and seek all means to avoid tax liabilities. Nigeria is not exempted from this economic menace. In spite of the several tax holidays enjoyed by firms in Nigeria, most firms have resorted to creatively avoid tax under the disguise of shareholders wealth maximization. This act is seen by the researchers as a corporate governance factor because the provision of bonus schemes by shareholders for managers for abnormal wealth maximization had justified the act of tax avoidance in the Nigerian corporate world.