Corporate Governance: Board of Directors’ Independence in Emerging Economies

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Adeyemi, S.B
Akinteye, S.A
Udotfia, I.E
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Purpose: The board of directors remains an important corporate governance mechanism through which the shareholders can exercise control over the activities of the firm, monitor and exercise oversight over the top executives and managers. In order to achieve this objective, the board of directors must be independent. This paper provides evidence using data from Nigeria on the degree of independence of the boards of directors of listed firms. Design/methodology/approach: The research employs the qualitative design using a cross sectional two-stage interview consisting of an initial and follow up process. Findings: Using concept mapping mindset and qualitative data analytical tools, the study finds that the boards of directors of the listed firms were independent and active. They functioned as an active corporate governance mechanism, exercising control and oversight over the affairs of the firms and their top executives. Research Limitations/implications: A potential limitation of this study could be the use of a small sample size of six Boards of Directors and biases associated with an opinionaire. The findings of the study may not be generalizable, beyond emerging economies. Originality/ Value: This research paper applies qualitative research method to examine the indicators of board independence in listed firms. It identifies the gap in legal framework codification and makes a case for non-proliferation of codes of corporate governance in emerging economies. It provides assurance of the relative independence of the board of directors in the listed firms studied, thereby expanding the body of literature in the research domain.
Staff Publications
Corporate Governance , Corporate Governance Mechanism , Board of Directors , Board Independence
Adeyemi, S.B, Akinteye, S.A and Udotfia, I.E (2015) Corporate Governance: Board of Directors’ Independence in Emerging Economies.European Journal of Applied Business Management, Vol.1 (2), 169-189pp.