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Dealing With Corporate Governance Challenges In Business, By Nonso Obikili

Published

7 years ago

November 13, 2018

Governance is a fundamental part of any functioning entity. The rules and systems which govern how entities function are perhaps the most fundamental thing for survival. Rules and systems that incentivise good decision making generally lead to better performing entities, while rules that incentivise bad behaviour tend to lead to breakdown. Most understand the importance of these rules and systems when we talk about governance with respect to countries, or states. In that instance, fair and enforced rules with proper checks and balances typically lead to countries that make better decisions and end up better off, whereas the opposite of that leads to countries that end up as basket cases.

However, governance rules don’t only apply to countries or states, but to businesses as well. The difference being that for businesses, instead of having presidents, national assemblies, and citizens, you have chief executive officers (CEOs), boards, and shareholders. Regardless, the principles of good governance still apply. Businesses which follow a good set of rules and systems of good behaviour tend to perform better than those that don’t.

Good corporate governance rules help ensure that businesses work in the interest of their shareholders, and don’t take actions that are not in the interest of the business. Good corporate governance rules also try to ensure that transitions within the company, such as in cases of a change of ownership structure, do not impede the normal functioning of the business. And, of course, any good system of rules has to come hand-in-hand with a system of enforcement. For businesses, such enforcement is typically done by regulators who try to make sure that rules are obeyed and penalities imposed on those who break them.

Unfortunately, as most Nigerians can attest to, sometimes the decision makers don’t always act in the interest of those who they should leading. Presidents and national assemblies don’t always act in the interest of their citizens and CEOs and board members don’t always act in the interest of their shareholders. And as you can probably guess, one common reason for this is to remain in power. Presidents want to remain in power. CEOs want to remain in power. Board members want to remain in power and sometimes act against the interest of their shareholders to do so.

One common way CEOs and board members try to stay in power is by a process called stock dilution. You see, if a board wants to act against the interests of shareholders, then one way of doing this is to change the structure of the business so that shareholders you don’t like, end up owning less of the company and having fewer voting rights consequently.

For example, if a board effectively owns 25 per cent of a business and therefore has 25 per cent voting rights and wants to take the business in one direction, but there are other shareholders who own maybe 40 per cent who don’t particularly like that course of action, then the 40 per cent can effectively block the 25 per cent. A board which wants to force through its course against the will of other shareholders, can create and sell more outstanding shares through private placements to people who they know will support them, thereby increasing their effective stake and simultaneously reducing the ownership shares of those shareholders who don’t support that course.

I know what you are thinking. Surely this can’t be right, and you are right. According to the rules, it shouldn’t be that easy. First, according to most corporate governance rules, boards are not allowed to organise private placements without the approval of shareholders. There are valid reasons why a company would want to sell new shares privately, of course, but those are typically only when they are desperate for new capital. But if boards need shareholder approval for this kind of dilution, then why don’t the shareholders who are at risk of their shares being diluted prevent this from happening? Well the unhappy shareholders can only prevent this kind of thing from happening if they know where the meetings are taking place. If they are systematically excluded from the general meetings, then they cannot act or vote against such actions.

This phenomenon repeats itself across many countries with weak corporate governance rules and enforcement and appears to be repeating itself here in Nigeria in the case of NEM Insurance. NEM apparently organised an annual general meeting, which some shareholders were not told about, at least not with the mandatory 21 days’ notice. At the AGM, the shareholders present approved a plan for a new private placement in which shares were to be sold at below the market value of the shares that are publicly traded on the stock exchange. NEM has been one of the better performing insurance companies in recent times, hence it was not clear if there was any emergency cash need. And of course, some shareholders appeared to have been systematically excluded from the AGM by not being notified on time, and therefore were not able to vote against such a plan. As expected, those shareholders are now up in arms fighting against what looks like a brazen attempt to dilute their stock.

This kind of shareholder infighting is obviously not good for the company. It has the potential to derail the focus that companies, especially publicly listed ones, need to run efficient operations and it casts a cloud over the long-term viability of the business. If board members can implement such an operation, then who is to say they won’t do similar things to future investors? It is in the interest of all shareholders to resolve these issues by following the properly laid out rules and guidelines and to resolve them quickly without putting the overall health of the business at risk.

It is also in the interest of the regulators whose job it is to ensure that businesses, especially publicly listed ones, maintain good corporate governance codes, as businesses tend to learn from each other. If one business gets away with sharp practices, then other try their hand at it as well. If everybody starts engaging in sharp practices, then the overall health of the system suffers. Perhaps the regulators, who are the enforces of good corporate governance, need to take a closer look at this and set a good example.

Nonso Obikili is an economist currently roaming somewhere between Nigeria and South Africa.

The opinion expressed in this article is the author’s and do not reflect the views of his employers.

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FCMB Limits Exposure in Fraud Attempt

Published

2 weeks ago

March 28, 2026

Sahara Weekly

More than ₦3 billion was targeted, but about ₦677 million reached the culprits, with recovery and prosecutions underway, reflecting how banks are responding to more sophisticated fraud risks.

Nigeria’s expanding digital banking sector is facing increasingly sophisticated fraud attempts, as financial institutions adapt to faster transactions and broader online services.

A recent case involving First City Monument Bank (FCMB), linked to fraudulent activity detected in December 2025, has drawn attention to how banks are responding to such incidents, with a focus on limiting exposure, recovering funds and working with law enforcement.

According to findings referenced in proceedings before the Lagos State Special Offences Court, the incident involved unauthorised transactions tied to a digital product. Early reports erroneously suggested more than ₦3 billion was lost. Subsequent clarification shows that over ₦3 billion was targeted, ₦2.4 billion was blocked and recovered, while ₦677 million got into the possession of the culprits. This outcome reflects the bank’s cyber security and monitoring capabilities, as well as improved collaboration among regulated financial institutions and with law enforcement agencies. Several suspects and beneficiaries have been apprehended, while recovery and prosecution efforts are ongoing, led by the Economic and Financial Crimes Commission (EFCC).

Proceedings at the Lagos State Special Offences Court have resulted in convictions, including that of a repeat offender, with restitution orders issued. Related matters are also being handled at the Federal High Court in Lagos, where additional suspects are being tried in connection with the scheme. This process is aimed at ensuring that bad actors are identified and permanently blacklisted from the financial system.

Authorities say recovery efforts are continuing as additional funds are traced.

Analysts note that the pace of legal action reflects closer coordination between financial institutions and enforcement agencies in addressing cyber-related financial crime.

The case comes as banks contend with more complex fraud methods, including social engineering and automated exploitation of system processes.

As digital products and platforms expand, so too does the risk associated with cyber-crime and related fraud.

“The scale of digital banking means risks are evolving alongside the systems,” said a Lagos-based financial analyst. “Institutions are now judged by how they manage these events.”

Observers say the sector is moving toward a stronger focus on response and recovery, rather than prevention alone.

This includes improving monitoring capabilities, strengthening transaction controls and enhancing collaboration with regulators and law enforcement. The FCMB case, with limited exposure relative to the amount targeted and ongoing recovery, reflects that shift.

For customers, the primary concern is the safety of their funds. In this case, there has been no indication of losses affecting customer deposits. Maintaining that level of protection remains central to sustaining trust in the financial system.

Nigeria’s financial sector continues to grow, supported by digital innovation and expanding access to banking services.

However, analysts say fraud attempts are likely to persist as systems become more complex and interconnected.

They say institutions will increasingly be judged not only on their ability to prevent incidents, but on how effectively they respond and recover when they occur.

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Ex-APC Deputy Guber flag bearer, Joshua MacIver backs Tinubu, express fears over implosion in Bayelsa APC

Published

3 weeks ago

March 21, 2026

Sahara Weekly

….congratulates new State Party Chairman, Warman Ogoriba

APC Deputy Governorship Candidate in the 2023 general elections in Bayelsa State, Great Joshua MacIver has declared his total commitment to the re-election of President Bola Tinubu come 2027, declaring that the Tinubu re-election project is non-negotiable.

Great Joshua MacIver, in his statement titled ” BAYELSA APC CONGRESSES: GOING FORWARD, A CALL TO LOOK INWARDS” and made available to newsmen in Yenagoa, warned APC leaders in the state to look Inward and take note of certain factors which may hinder or cut short our victory.

According to Great Joshua MacIver, such noticeable pitfalls include the imbalance in the united front being put up by the State Governor,Senator Douye Diri among various political blocs in the state.

In the statement issued at the weekend. Great Joshua MacIver stated that “First, before His Excellency, Senator Douye Diri, joined the APC in the state, there were clearly two political blocs that made up the party, with the approximate population ratios of the blocs standing at 95% to 5%.”

“After the entrance of His Excellency, Senator Douye Diri, ONLY THE SMALLER BLOC IS BEING CARRIED ALONG IN THE AFFAIRS OF THE PARTY, leaving the greater percentage to their fate, and this situation has the potential to build anger and dissatisfaction in our dear party.”

” The consequence of this has been the high level defection we have witnessed in the party recently and we believe more may likely follow, if we do not put our house in order.”

” If we do not pull together as a party, we may witness a situation where we will lose key stakeholders, especially after the State and National Assembly Primaries as well the Gubernatorial Primaries.”

“Finally, while it is very clear that we are the party to beat in the 2027 elections and that our loyalty to Mr. President IS NON-NEGOTIABLE, we must make haste to say that we cannot afford to create situations or loopholes in our unity which will be exploited by other political interests in the state. We cannot afford to under-rate anyone.”

“Our core interest remains the re-election of Mr. President, a project to which we have committed our all. We also pledge our total loyalty to the party as we have no alternative to the APC. However, our concern is that we must, as a party, look inwards and ensure that we do not create loopholes that can impede our common goal.”

Great Joshua MacIver, however congratulated the newly elected State Executives of the APC in Bayelsà State led by Hon. Warman Ogoriba, saying their emergence is welcomed at this critical time in our national history.

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How Primate Ayodele Foretold Borno Suicide Bomb Attack A Few Weeks Ago (VIDEO)

Published

3 weeks ago

March 17, 2026

Sahara Weekly

“You Can’t Use Primate Ayodele To Score Points For Your Failed Political Ambitions” – Fulani Group Blasts Umar Ardo

At least 23 people were killed in a series of suspected suicide bombings, police in Nigeria’s northeastern city of Maiduguri said on Tuesday.

https://www.stanbicibtcbank.com/nigeriabank/personal/products-and-services/all-loans/stanbic-ibtc-mreif-home-loans

More than 100 other people were injured in the blasts that took place on Monday evening in the capital of Nigeria’s restive Borno state.

No group has claimed responsibility for the suspected attacks.

The deadly blasts come after a military post was attacked overnight Sunday to Monday, which authorities blamed on suspected Islamist militants.

This sad incident is coming barely two weeks after Primate Elijah Ayodele, the Leader of INRI Evangelical Spiritual Church specifically warned against attacks in some states. He mentioned these states while calling on security operatives to pay close attention to them.

These were his words:

“Another attack is coming up in these following states where the military must watch carefully and intelligently; Kano, Kaduna, Zamfara, Kebbi, Niger, Borno, Kwara and Kogi state. They want to do a deadly attack, it’s preventable but it depends on how they will handle it. I have told you about the danger coming up.”

@primateayodele

#borno #nigeria #fulfillment #security #primateayodele

♬ original sound – Primate Ayodele

Unfortunately, some of our military agencies don’t believe spiritual intelligence can save the country from so much danger hence, their neglect of this prophetic warning but now, it has been fulfilled with the miliary losing credibility by the day while Primate Ayodele continues to gain momentum.

Likewise, At least 26 passengers and crew sustained varying degrees of injuries on Monday following an accident involving the Kaduna–Abuja train, according to the Nigerian Railway Corporation (NRC).

Opeifa explained that the train departed Rigasa in Kaduna at 7:15 a.m. and was approaching Asham station around 9:16 a.m. when a loud bang was heard after the power car and trailing locomotive collided with one of the passenger coaches.

In July 2025, Primate Ayodele asked nigerians to pray not to see train mishap on the Kaduna-Abuja route.