To What Extent Do Companies Listed on the Nigerian Stock Exchange Comply with Corporate Governance and Risk Management Principles?

Michael Agamah


This study set out to ascertain the extent to which public companies listed on the Nigerian Stock Exchange (NSE)
comply with corporate governance and risk management principles (the principles), based on the assumption that
directors of NSE-listed companies will, on the basis of their awareness of the principles, “[ensure] that corporate
actions, agents and assets are directed at achieving the corporate objectives established by the corporation’s
shareholders” (Sternberg, 2004, p. 28).
Using survey design, closed-ended questionnaires, and secondary data sourced from the Corporate Affairs
Commission, the survey instrument was administered on 35 companies selected by random sampling (from a
total population of 113), out of which 26 responses were received. The responses were statistically analyzed to
measure the extent of the respondents’ awareness of, and compliance with, the principles. The Pearson
correlation coefficient was employed to determine the relationship between the level of awareness of, and extent
of compliance with, the principles.
The research results show that even though there is a high level of awareness of the principles amongst
NSE-listed companies, “negligible/scant positive” (Buglear, 2012, p.163) correlation was established between
the level of awareness of these principles and the extent of compliance by the companies. An implication of this
scenario for managerial practice amongst the NSE-listed companies is that more corporate resources need to be
deployed to strengthen the compliance function in these companies.

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