Impact of Corporate Governance on Organizational Performance
Introduction
Nigeria is well known because of its initiative towards growth and the capability towards development. Through the help of the agricultural sectors and the promise of industries, the various firms as well as the investors may find a good fortune in investing in the country. Although Nigeria is considered as a developing country that has a great culture, still the country is attempting to promote various policies and economic schemes to adequately answer the needs of its people while continuously processing to achieve the development.
Background
Nigeria sector, although comprised with so much potential, has an existing corruption in both public and private sector. This creates a big impact in the country most especially that this is another populous third world country. The very fact that it is considered as one of the highest crude oil producers; still, it belongs to the world’s 25 poorest countries. The corruption in the leadership in one of the leading reasons on the development is unnecessary after the several attempts. The main challenge in Nigeria is the establishment of the policies that can address the issue of corruption and the other associated lack of control. Therefore, the corporate governance is proposed to gain the self-confidence among its people such as continuing the human development and attaining the integrity (Osiyemi, 2006).
Problem Statement
There are two problems that are stated in the study:
First is the implementation of corporate governance in the leadership in both public and private organizations.
Second is the impact or changes that the corporate governance can create in the country.
Research Aim and Objectives
The main aim of the study is to investigate the impact of corporate governance among the leadership in public and private sectors of Nigeria. In order to achieve this aim, there are four objectives that need to be satisfied. First is to determine the importance of corporate governance in the current situation of the country. Second is to determine any policies implemented in the sectors to fight the problem in corruption. Third is to identify the benefits or pitfalls in the application of corporate governance in the country by comparing the Nigerian economy to the other “third world countries”. And fourth is to establish recommendation in which the corporate governance can be strengthened.
Significance of the Study
The significance of the study is to promote the corporate governance to lessen the effects of corruption. In fact, in order to fight the poverty, the study seeks the appropriate application of policies or standards. For such the corporate governance can be the primary step in delivering the changes towards the promotion of effective leadership in the public and private sectors.
Brief Literature Review
Corporate governance refers to the set of policies that can influence the decisions of the managers or leaders while setting aside the ideas of ownership, control and personal interest. In the monitoring of the superiors, there is an addressed effectiveness in the operation and corporate control. The corporate governance became an important in most of the organizations not only in businesses but also in governmental sectors, for it is promoting the standards processes in accounting, economics and financial decisions, management, and overall corporate strategy. The structure of corporate governance has an impact in the behavior of a leaders as well as the organizational performance. Based on the past researches, it is difficult to measure the effectiveness of corporate governance unless there is a consistent pattern in the accounting outcome and organizational performance (Larcker, Richardson, Tuna, 2007). In the application of corporate governance, the institutions such as banks, business organizations, and government sectors will experience the determination in completing or achieving the strategic goals and have an efficient management. Because of the existence of corporate governance, the formation of organizational structure can be applied to secure the goals while creating the appropriate actions to achieve the said goals. In the continuous practice of corporate governance, there is an assurance that the interests are allotted for the shareholders of the corporate (in business organizations) and for the people (banks and government bodies) (Kapital Bank, 2009).
Methodology
The suggested method that can be used in the study is the secondary data. By reviewing the reports done by the country and its institutions such as banks, oil companies, and other industries, the study can gather the information regarding the corporate governance implemented in these areas. Furthermore, the study can also assess the strategic goals and principles that the institutions achieved through the use of corporate governance.
References:
Kapital Bank, (2009) General Principles of Corporate Governance, Corporate Ethics and Organizational Structure [Online] Available at: http://www.kapitalbank.az/files/0006/General%20Principles%20of%20Corporate%20Governance.pdf [Accessed 07 September 2010].
Larcker, D.F., Richardson, S.A., & Tuna, I., (2007) Corporate Governance, Accounting Outcomes, and Organizational Performance, The Accounting Review, 82(4) [Online] Available at: http://kjxy.znufe.edu.cn/ggl/200812/P020081222713561960885.pdf [Accessed 07 September 2010].
Osiyemi. A.O., (2006) The Impact of Values-Based Leadership and Corporate Governance on Organizational Performance [Online] Available at: http://esvc000040.wic056u.server-web.com/grad/gradosiy.pdf [Accessed 07 September 2010].
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