Corporate governance in a developing economy: barriers, issues, and implications for firms

Purpose Effective corporate governance is significant for firms in developing countries because it can lead to managerial excellence and help firms with a weak corporate governance structure to raise capital and attract foreign investors. The purpose of this paper is to examine the barriers, issues, and challenges hindering effective development and implementation of corporate governance in Nigeria. Design/methodology/approach A combination of quantitative and qualitative research methods was employed to collect information. Specifically, data were collected from 296 managers, company presidents, and board of directors in selected firms. Descriptive data and interview analyses are presented with respect to the barriers and issues hindering effective corporate governance development and implementation in Nigeria. Findings The study provides significant current information on corporate governance and barriers hindering its development and implementation in Nigeria. The findings reveal a number of constraints that hinder the implementation and promotion of corporate governance in Nigeria. These constraints include weak or non‐existent law enforcement mechanisms, abuse of shareholders' rights, lack of commitment on the part of boards of directors, lack of adherence to the regulatory framework, weak enforcement and monitoring systems, and lack of transparency and disclosure. Research limitations/implications The study was limited to four cities in Nigeria. A broader geographic sampling would better reflect the national profile. Another limitation could stem from the procedure used in data collection (drop off and pick up). However, extreme measures were taken to protect the identities of the respondents. Originality/value The significance of this study stems from the fact that very few studies have explored the impact of human resource challenges and prospects in Nigeria. The results provide additional insights into corporate governance practices in Nigeria, a sub‐Saharan African country. This region has thus far been neglected by management researchers, and so the insights gained from this study will contribute to the future development of this line of research, particularly in a non‐Western country like Nigeria.