AN APPRAISAL OF THE CONCEPT OF MULTIPLE DIRECTORSHIPS UNDER NIGERIAN COMPANY LAW

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AN APPRAISAL OF THE CONCEPT OF MULTIPLE DIRECTORSHIPS UNDER NIGERIAN COMPANY LAW

Abstract:

Increasing cases of dissatisfaction with the activities of members of board of directors of companies provoked the thought of researching into the subject of the practice of multiple directorships under Nigerian company law. At common law, multiple directorship is a situation where a director is on the board of two or more companies. The Nigerian corporate industry today is characterized by the practice of multiple directorships in their governance. The Nigerian Companies and Allied Matters Act, 2004 (CAMA) recognized the concept and has in section 281 of the Act provided for multiple directorships. This research work examines the concept and practice of multiple directorship in corporate management in Nigeria with particular reference to the directors fiduciary duties of loyalty and good faith, duty of care, due diligence, transparency and accountability to the different companies on which a. director is on their boards. The research establishes that the concept of multiple directorship is incompatible with the application of fiduciary duties of loyalty and good faith of directors to their companies. It encompasses various possibilities of grave abuses that could contribute largely to the malaise of many companies due to poor performance of the board and consequent failure and collapse of the corporate entities. The research further establishes that the Nigerian company legislation and the various rules and regulations put in place by the companies regulatory authorities are inadequate to address the dangers of conflicts of interest and the negativeness brought about by the practice of interlocking directorate/multiple directorship that have made several corporate entities moribund. The overall implication of the findings of the research is that the Nigeria Company Law need to be reformulatec and adequate rules and regulations put in place by the various company regulatory authorities as recommended in the thesis to put the Nigerian corporate industry on a booming path.

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