Weak Corporate Governance Threatens Nigeria’s $1 Trillion Economy Ambition: Compliance Lessons for Businesses

• ICSAN urges stronger accountability, ethical leadership and risk management as governance professionals are called to take a more strategic role in corporate decision-making

Weak corporate governance, inadequate accountability and poor ethical leadership could undermine Nigeria’s ambition to build a $1 trillion economy, the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has warned.

Speaking at the institute’s 50th annual conference and diamond jubilee celebration in Lagos, ICSAN President and Chairman of Council, Uto Ukpanah, stressed that sustainable economic growth requires businesses to move beyond profit maximisation and embrace transparency, responsible decision-making and long-term value creation.

The warning highlights the importance of effective corporate compliance frameworks in strengthening institutional credibility, protecting stakeholders and sustaining investor confidence.

Ukpanah said businesses must balance financial performance with their responsibilities to employees, investors, regulators, consumers and host communities. She added that economic uncertainty, technological disruption and increased scrutiny of corporate conduct make sound governance and organisational resilience increasingly important

Governance failures pose compliance and financial risks

Former Nigerian Exchange Group Chief Executive Officer, Oscar Onyema, warned that weak governance and limited institutional credibility could erode investor confidence and restrict access to long-term capital.

From a compliance perspective, these risks extend beyond reputational damage. Weak internal controls, inadequate board oversight, unclear accountability and ineffective risk management can expose organisations to regulatory breaches, financial losses, misconduct and operational disruption.

For businesses operating in Nigeria and across Africa, corporate governance should therefore be treated as a fundamental component of enterprise risk management rather than a formal obligation undertaken solely to satisfy regulators.

Onyema also urged company secretaries and governance professionals to move beyond traditional administrative and compliance functions and become strategic advisers to boards. Their responsibilities should include supporting ethical decision-making, strengthening governance structures and ensuring that corporate actions align with applicable laws, regulatory expectations and long-term business objectives.

AI governance and emerging compliance risks

Lagos State Governor Babajide Sanwo-Olu called on ICSAN to develop governance standards for artificial intelligence, data analytics and other emerging technologies used by businesses and public institutions.

The call reflects the growing need for organisations to establish appropriate oversight of technology-driven decisions, including clear accountability, data protection, transparency and risk assessment.

As companies increasingly deploy automated systems and artificial intelligence, boards and compliance teams must ensure that innovation is supported by proportionate controls, appropriate human oversight and processes for identifying and addressing emerging risks.

ESG must be embedded in business strategy

Business consultant Professor Biodun Adedipe said organisations should integrate environmental, social and governance (ESG) principles into their corporate strategies, risk management frameworks and decision-making processes.

He cautioned against treating sustainability merely as a compliance requirement, describing it instead as a driver of competitiveness and long-term business survival.

For compliance professionals, this means ensuring that ESG commitments are supported by credible policies, measurable objectives, reliable reporting and appropriate oversight rather than being limited to corporate statements.

From compliance policies to measurable outcomes

The central lesson from ICSAN’s warning is that effective corporate governance requires more than documented policies and formal structures. Organisations must demonstrate that their controls work, responsibilities are clearly assigned, risks are actively managed and leadership decisions meet appropriate ethical and legal standards.

For Nigeria to achieve its economic ambitions, businesses must build institutions that inspire investor confidence, protect stakeholder interests and demonstrate accountability.

Ultimately, strong corporate governance and effective compliance are not obstacles to profitability. They are essential foundations for sustainable growth, institutional credibility and long-term economic development.