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Corporate governance has turned out to be one of the buzzwords in the language of global business. The global financial catastrophe that swept the financial markets and economies around the world, causing bankruptcies and resulting economic recession has pushed the concept of corporate governance into the limelight (Pintea & Fulop, 2014). Cioffi (2000) defines corporate governance (CG) as a nexus of institutions defined by law, financial regulation, and labor law. According to La Porta, Lopez, Shleifer and Vishny (2000) CG is to a large extent, a set of mechanisms through which outsider investors protect themselves from expropriation by insiders. Depending on the objectives set to govern the company, this system is called to regulate and manage the relationships among the stakeholders including the board of directors and the shareholders. It also deals with those mechanisms and controls that are designed to reduce or eliminate the principal-agent problem in the organization. It is believed that corporate governance in its practical application is an important key that unlocks the true value of a business regardless of the firm size (Bates, 2013). The practice of good governance in a company mitigates risk, improves performance, opens the way to efficient financial markets, and establishes an attractive investment climate, showing transparency and social responsibility (Pintea & Fulop, 2014). Since the Cadbury report (), CG has gained momentum worldwide because of numerous scandals that have affected the world of business, insufficient disclosure and unethical business practices. In continental Europe, countries that followed civil law have developed corporate governance frameworks that focused on stakeholders.

In every economy, developed and emerging, there is always an imbalance between surplus units and the deficit units. This establishes the need for intervention by the money and capital markets in order to strike a balance in the financial system. The financial resources supplied by the surplus units in the form of investments are transferred to the management of investee companies, thereby divorcing ownership from management. A principal and agent relationship arises because the financier of the firm's day to day business operations is different from the person who manages and controls the firm. Therefore the Board of Directors has the responsibility not only to run the firm in the best interest of the shareholders but also to give proper account to the shareholders for the efficient use of the resources given to them with a view to maximizing their wealth. The procedures to be followed by the Board of Directors in discharging their aforementioned obligations are what eventually led to “Corporate Governance” (Maher and Andersson, 1999). According to Shleifer and Vishny corporate governance deals with the ways in which the financiers of corporations assure themselves of getting a return on their investment and establishes how the various participating shareholders and other stakeholders, including the management and the board of directors interact in determining the direction and performance of corporations. It involves promoting corporate fairness, transparency and accountability. Good governance holds management accountable to boards and boards accountable to the owners and other stakeholders, (Shleifer and Vishny, 2015 cited in Al-Haddad, Alzurqan and Al-Sufy, 2011). Unfortunately due to poor corporate governance and other factors such as misrepresentation of information, directors maximizing their personal wealth at the expense of the organization, conflicts arising as a result of separation of ownership and management, some companies are not able to achieve growth and development. In the early 2000s, the massive bankruptcies (and corporate malfeasance) of Enron and WorldCom paved way for the passage of the Sarbanes-Oxley Act of 2012 (Kaplan, 2012). Due to this, various models, concepts and measures were developed to ensure that these corporate organizations not only last beyond expectations but also operate in the best interest of all the stakeholders including the government. One of the most important concepts developed by business and financial experts is corporate governance (Sanusi, 2012). But even with the enactment of the Sarbanes-Oxley Act of 2012 and the strengthening of the Code of Corporate Governance by the Financial Reporting Council of Nigerian (FRCN), companies are still not growing; many companies are still liquidating.

On the other hand, business growth is becoming more and more important for all the companies, across the globe. Strategically, ‘value-creation' is the ultimate mission of all what we do. However, in today's global competitive battles, a mere maximizing growth may assist the company to accomplish its short-term goals but not the longrun objective what they seek to i.e., the ‘value creation' (Ramezani et al., 2010). Empirical shreds of evidence too, suggests that value creation maximizes around business growth rate of an organization and decreases sharply, once actual growth exceeds sustainable growth rate (Ataünal et al., 2016). Thus, realizing the empirical fact, many companies have been pushing hard for attaining business growth and integrating the same into their long-term strategic plan. Despite the emerging orientation of corporate growth, the legitimate question of how to achieve business growth remains a profound mystery for corporate managers. Sakai & Asaoka (2013) believe establishing an adequate and effective corporate governance system is the pre-requisite to enable sustainable growth of the firms. Pintea & Fulop (2014) support the view and claimed good corporate governance practices play a crucial to assure corporate sustainable growth, in the present context of globalization. An empirical shred of evidence as well, suggests that corporate governance practices exercise strong influence in explaining the corporate growth (Li et al. 2015). Several studies have been done in developed countries to investigate the relationship between CG, investment and business growth. However, very few studies examine this relationship in emerging markets. Moreover, the transparency of disclosure practices is still poor and the concentration of power remains in the hands of directors as well as other key management connections. More broadly, this study examines the effect of corporate governance on business growth in Nigeria.


Corporate governance has in recent years assumed considerable as a veritable tool for ensuring corporate survival since business confidence usually suffers each time a corporate entity collapses. Most of the business failures in the recent past are attributed to failure in corporate governance practices. For instance, the collapse of banks in Nigeria in the early 1990s and the recent distress of some Nigerian banks were as a result of inadequate corporate governance practices. Poor corporate governance, poor risk management practices, inability to manage expansion, low assets quality, inadequate supervisory framework and unethical practices among top banking chiefs who gave out loans without required collateral were identified as some of the reasons for the current financial crisis in the country.

In Nigeria, a survey, by the Securities and Exchange Commission (SEC) reported in a publication in April 2013, showed that corporate governance was at a rudimentary stage, as only about 40% of quoted companies, and had established codes of corporate governance in their firms. The complexity and trouble with most companies in Nigeria is that the directors work to the answer, mark their own examination scripts, score themselves high and initiate the applause. The system is still fraught with unethical practices that are at variance with good corporate governance principles in terms of poor asset quality due to absence of risk management framework, use of spurious documents to purchase exchange, and making inaccurate returns on financial and liquidity positions. The main question that readily agitates the mind is the relationship between corporate governance and the growth of consumer goods in Nigeria, as well as the effect of corporate governance on business growth of consumer goods in Nigeria.


The main objective of the study is to examine the effect of corporate governance on business growth of consumer goods in Nigeria. The specific objectives of the study are:

  1. To provide an overview of various components of corporate governance
  2. To ascertain the contributions of corporate governance to the overall growth of the consumer goods firm in Nigeria
  3. To examine how the integral system of corporate governance can enhance corporate value of the consumer goods firm in Nigeria
  4. To ascertain the effect of corporate governance on business growth of consumer goods in Nigeria.
  5. To examine the relationship between corporate governance and business growth of consumer goods in Nigeria


  1. What are the various components of corporate governance?
  2. What are the contributions of corporate governance to the overall growth of the consumer goods firm in Nigeria?
  3. Can an integral system of corporate governance enhance corporate value of the consumer goods firm in Nigeria?
  4. What is the effect of corporate governance on business growth of consumer goods in Nigeria?
  5. What is the relationship between corporate governance and business growth of consumer goods in Nigeria?


Hypothesis 1

H0: Corporate governance has not significantly improved the growth of the consumer goods firm in Nigeria

 H1: Corporate governance has significantly improved the growth of the consumer goods firm in Nigeria.

Hypothesis 2

H0: There is no significant relationship between corporate governance and business growth of consumer goods in Nigeria

H1: There is a significant relationship between corporate governance and business growth of consumer goods in Nigeria


The study will f provides an insight into understanding the degree to which the banks that are reporting on corporate governance have been compliant with different section of the codes of the best practice and where they are experiencing difficulties.

Consumer goods institutions, private sectors, stakeholders as well as other corporate titans will find this study as an invaluable asset which spelt out ways of improving an organization's financial performance via corporate governance

The research study will also be beneficial to future researchers and students wishing to carry out similar study in their future research undertakings.


The study is delineated to examine the effect of corporate governance and business growth of consumer goods in Nigeria.


Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the .


Corporate Governance: These refer to the set of rules, controls, policies and resolutions put in place to dictate corporate behaviour to the stakeholders of a firm.

Consumer Good:  Consumer good is a commodity that is used by the consumer to satisfy current wants or needs, rather than to produce another good. A microwave oven or a bicycle is a final good, whereas the parts purchased to manufacture it are intermediate goods.

Business Growth: The process of improving some measure of an enterprise's success. Business growth can be achieved either by boosting the top line or revenue of the business with greater product sales or service income, or by increasing the bottom line or profitability of the operation by minimizing costs.

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