Corporate Governance as a Transformation Tool in Sustaining Nigeria’s Small and Medium-Sized Enterprises (SMEs)
The findings from the challenges affecting most Small and Medium-sized Enterprises (SMEs) in Nigeria highlights low managerial skills and lack of access to capital as the significant contributory factors to the constraints the companies face. In addressing the issues of low managerial skills and lack of access to capital, this thesis examines the causal reasons for low managerial skills, and lack of access to capital as well as, the existing mechanisms in place that take cognisance of these risks accruing from the contributory factors. Upon the examination and analysis of literature, the thesis hypothesis and questions, the thesis finds that the lack of proper knowledge of good corporate governance practices, Nigeria’s institutions, and regulatory environment are critical factors that contribute to the lack of good managerial skills and lack of access to capital. In consideration of how the regime of corporate governance enables companies to be conscious of the process by which companies are governed and controlled to reach its purpose and the importance of SMEs to any country, there is justification for the State to intervene to ensure SMEs are successful. In introducing the regime of corporate governance to SMEs in Nigeria, the thesis recommends and demonstrates the importance of co-regulation and a hybrid enforcement model of balanced soft and hard laws as an approach to improving the managerial skills and access to capital in Nigeria’s SMEs. The thesis proposes co-regulation, which is a situation whereby the government, together with the SMEs, develops a corporate governance regulation for SMEs. Co-regulation with its hybrid enforcement model came about following the theoretical examination of Nigeria’s SMEs' background. Including lessons from corporate governance theories, new institutional theory, constructivist institutionalism, and regulatory theories. Experiences from the system of corporate governance in the United Kingdom, entrepreneurial, and managerial self-efficacy assisted the thesis as well. The hybrid model of enforcing co-regulation consists of soft law enforcement approach in the areas where flexibility is necessary and hard law in the areas where coercion is essential to maintain effectiveness that would not negate the overall aims of the regulatory model. The administration of co-regulation contains tools within Nigeria’s context to bring about the desired result every corporate governance regime works to achieve – a successful company.
Corporate governance, SMEs, Nigeria, Regulation
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