Corporate governance is under the spotlight as directors face growing accountability and ethical scrutiny. Boardroom intrigues, power tussles, and strategic repositioning have become more common than ever. Yet, there are moments when these events serve not only as headlines but as wake-up calls for regulators, investors, and stakeholders about the state of corporate governance.

One such moment recently unfolded in the Nigerian financial sector, which has raised urgent questions about boardroom accountability, shareholder rights, and the sanctity of the governance structures meant to safeguard them. In a widely publicized and highly consequential development, a major shift in the board leadership of a systemically important Nigerian financial institution played out in public view.

A group of shareholders, one of them claiming majority ownership, sought to take control of the board by initiating sweeping changes at the topmost level of the bank’s governance structure. This included the removal of the sitting chairman and key board members and the installation of a new leadership team.

While changes in board leadership are not new in corporate circles, what made this case particularly significant was the manner and opacity with which it occurred. Allegations surfaced regarding the lack of due process, the absence of regulatory compliance, disregard for existing governance frameworks, and potential conflicts of interest.

Furthermore, questions were raised about the communication or lack thereof between key stakeholders, including minority shareholders, regulatory bodies, and existing board members. The events highlighted several breaches of the principles enshrined in the Nigerian Code of Corporate Governance (NCCG) 2018, particularly those relating to transparency, board independence, and accountability.

Principle 23 of the NCCG 2018 emphasizes the importance of disclosure: A company shall disclose material information in a timely and balanced manner to ensure that shareholders and other stakeholders are provided with equal and timely access to material information.

In this case, the abrupt changes occurred with little to no official communication to the wider shareholder base. The lack of prior notice or an Extraordinary General Meeting (EGM) deprived minority shareholders of the right to participate in governance decisions that affect their investments. Such opacity is a violation of the spirit of transparent corporate conduct.

Principle 5 of the NCCG 2018 outlines that: The Board shall be of a sufficient size relative to the scale and complexity of the company’s operations and be composed in such a way as to ensure diversity of experience without compromising independence.”

Replacing the board without an independent nomination process and in the absence of clear disclosure about the qualifications and independence of the new members undermines this principle. It raises concerns about undue influence and whether the new board can act in the best interest of the company and not just a specific shareholder bloc.

Principle 21 of the NCCG 2018 stresses the need for the protection of shareholder rights: The Board shall ensure the protection of shareholders’ rights and the equitable treatment of all shareholders.

The unilateral action by a shareholder group, allegedly claiming majority control, without an open and consultative process, infringes upon this principle. In particular, minority shareholders were neither consulted nor informed, suggesting a breach of equitable treatment standards.

 This case offers critical lessons for boards, investors, regulators, and the corporate community at large. Corporate governance exists to protect all stakeholders, not just the most powerful. Organizations must resist the temptation to act outside laid-down rules, regardless of the size of their stake or perceived influence.

All changes in board composition must adhere strictly to the company’s Articles of Association, NCCG provisions, and relevant regulatory frameworks. The appointment of directors must follow a transparent, merit-based process that ensures independence from dominant shareholders.

This preserves the fiduciary integrity of board decisions and assures stakeholders that directors are acting in the company’s best interests. Stakeholder confidence is the bedrock of any sustainable business. Sudden and opaque governance changes erode this confidence.

Companies should communicate changes proactively, through official channels, and in a language that is transparent, factual, and timely. This incident is a clarion call for regulatory bodies to strengthen their monitoring and enforcement mechanisms. Corporate governance must go beyond ticking compliance checkboxes.

 It must be ingrained into the DNA of organizations. Boards must periodically review governance policies, conduct training for directors, and evaluate board performance using independent experts.

Regulators like the Financial Reporting Council of Nigeria (FRCN) must ensure that companies comply with NCCG 2018, and penalties for breaches must be stringent enough to serve as deterrents. Investors, particularly retail and minority shareholders, need greater education on their rights and the mechanisms for redress.

Encouraging internal whistleblower systems that allow staff or directors to report governance breaches anonymously can help expose and prevent irregularities early. Board members should undergo periodic governance training and certification to stay current with evolving standards and expectations.

 Independent board evaluations should be disclosed annually in company reports. This promotes transparency and accountability. Ultimately, governance is not just about structure; it is about values. The recent boardroom power shift in one of Nigeria’s most prominent institutions highlights both the fragility and importance of strong governance systems.

As stakeholders in Nigeria’s corporate environment, it is a collective duty to safeguard these systems from abuse and to continuously build trust through accountability, fairness, and transparency. The future of our nation's corporate environment depends on how well we learn from episodes like this and how committed we are to transforming those lessons into tangible reforms.

Corporate governance is not a formality but the heartbeat of sustainable enterprise. When integrity fails at the top, trust crumbles below, and without the will to uphold ethical codes, accountability and public confidence are lost, leaving institutions vulnerable to internal decay and external distrust.

Research & Advocacy Department,