CORPORATE GOVERNANCE PRINCIPLES AND THE SUSTAINABILITY OF COMPANIES IN NIGERIA

Abstract

Corporate governance has become an indispensable component of the legal and institutional framework for the survival, growth and sustainability of modern companies. In Nigeria, recurrent corporate failures, financial mismanagement, abuse of corporate powers, weak board oversight, inadequate disclosure, conflicts of interest and ineffective regulatory enforcement have continued to raise fundamental questions concerning the effectiveness of existing corporate governance mechanisms. This article examines the relationship between corporate governance principles and the sustainability of companies in Nigeria from a legal perspective. It argues that corporate sustainability cannot be achieved merely through profitability or short-term financial performance but requires a governance architecture founded upon accountability, transparency, fairness, responsible leadership, effective risk management, ethical conduct, stakeholder protection and long-term value creation. The article adopts a doctrinal legal research methodology, relying primarily on statutes, regulatory codes, judicial authorities, institutional materials and relevant scholarly literature. The conceptual framework examines corporate governance, corporate sustainability, accountability, transparency, stakeholder protection and corporate responsibility. Particular attention is given to the Companies and Allied Matters Act 2020, the Financial Reporting Council of Nigeria Act 2011 (as amended), the Nigerian Code of Corporate Governance 2018, the Securities and Exchange Commission's corporate governance requirements and the Investments and Securities Act 2025. The article further examines board effectiveness, directors' duties, shareholder rights, audit and assurance, risk management, ethical conduct, sustainability reporting and stakeholder engagement as mechanisms for corporate sustainability. It identifies weak enforcement, regulatory fragmentation, inadequate board independence, corruption, ineffective disclosure, ownership concentration and insufficient sustainability integration as continuing challenges. It concludes that Nigeria's corporate governance framework has undergone substantial development but requires stronger enforcement, improved regulatory coordination, enhanced board professionalism, mandatory sustainability integration and greater accountability of directors and controlling shareholders. The article recommends a transition from a predominantly compliance-oriented model towards an integrated governance and sustainability framework capable of promoting resilient, responsible and enduring companies in Nigeria.