A Critical Analysis of the Impacts of Corporate Governance in the Banking Sector in Nigeria

It is absolutely necessary that each bank in Nigeria not only should put a code of corporate governance in place but must make sure it is observed by all the staff in the banks, inclusive of the board members whose duties is to ensure that the staff observe the code and to enforce sanctions should any staff goes contrary to the code of corporate governance. Therefore, it is germane to note that efficient corporate governance is necessary in the banking sector to survive and to be sanitized as it confers on the banks certain indisputable advantages such as increase in profitability, robust and sound cash flow, solid capital base, and ensuring that the interest of the staff is aligned with that of bank for greater productivity. Such banks engender the interest of the stake holders and confidentiality of the public which will in turn lead to the increase in depositors’ fund. A sound banking sector is absolutely necessary for development of financial market that will trigger economic growth and development. On the contrary, poor or lack of corporate governance on the banking sector may lead to the distress of many banks and impacting negatively on the economy. The thrust of the paper is to examine the impacts of corporate governance on the banking sector, the negative consequences of poor or lack of corporate governance on the banking sector will be subjected to deeper analysis and the paper will go a long way to proffer recommendations to improve corporate governance on the banking sector in Nigeria.