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4 These corporate governance systems are also known as the Anglo-American model (market-based system), the continental European model (bank-based and block-holder model) and the Asian Pacific system. Each model identifies the following constituent elements: key players in the corporate environment; share ownership pattern; composition of the board of directors; regulatory framework; disclosure requirements for publicly-listed stock corporations; corporate actions requiring shareholder approval; and interaction among key players. See Elson, C et al. “FMA roundtable on new developments in European corporate governance” (2017) 29/1 Journal of Applied Corporate Finance 50CrossRefGoogle Scholar; La Porta, R et al. “Law and finance” (1998) 106 Journal of Political Economy 1113CrossRefGoogle Scholar.

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9 The notion of “comply or explain” first came to recognition in 1992 following the Cadbury Report on the Financial Aspects of Corporate Governance. In the UK code, a prominent position is given to the functioning and remuneration of the board of directors, naming independent directors and the role of non-executive directors. See A Cadbury The Report of the UK's Committee on the Financial Aspects of Corporate Governance (1992) (the Cadbury Report). Other related models are: “comply and explain”, “apply or explain” and “apply and explain”.

10 MM Siems and OS Alvarez-Macotela “The G20/OECD Principles of Corporate Governance 2015: A critical assessment of their operation and impact” (2017) Journal of Business Law 310.

11 R Alex “Jim Obazee: 7 sins of fired secretary of Financial Reporting Council” (10 January 2017) Nigeria Bulletin, available at: <https://www.nigerianbulletin.com/threads/jim-obazee-7-sins-of-fired-secretary-of-financial-reporting-council.230414/> (last accessed 3 September 2019).

12 C Nwachukwu “Capital market investors reject new FRCN corporate governance code” (3 November 2016) The Guardian (Nigeria), available at: <http://guardian.ng/business-services/capital-market-investors-reject-new-frcn-corporate-governance-code/> (last accessed 3 September 2019).

13 M Adewale “Code of corporate governance 2018 supersedes CBN, SEC rules, says FRCN” (19 July 2018) The Guardian (Nigeria), available at: <https://guardian.ng/news/code-of-corporate-governance-2018-supercedes-cbn-sec-rules-says-frcn/> (last accessed 3 September 2019).

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18 See the G20/OECD Principles of Corporate Governance (2015).

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28 Ibid.

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30 Ibid.

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34 Kato, K et al. “Is Japan really a buy? The corporate governance, cash holdings, and economic performance of Japanese companies” (2017) 44/3–4 Journal of Business Finance and Accounting 485CrossRefGoogle Scholar.

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36 The economies were selected on the basis of corporate governance development and the availability of data. The countries surveyed were: West Africa: Nigeria and Ghana; North Africa: Egypt and Tunisia; Southern African: Malawi, Mauritius, Mozambique, South Africa, Zambia and Zimbabwe; and East Africa: Kenya, Uganda and Tanzania. For details, see State of Corporate Governance in Africa: An Overview of 13 Countries (2016, African Corporate Governance Network) at 114–15, available at: <https://www.afcgn.org/wp-content/uploads/2016/03/ACGN-Corporate-Governance-Report-Feb-2016.pdf> (last accessed 3 September 2019).

37 See G20/OECD Principles, above at note 18 at 34.

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41 Ibid.

42 Licht, A “The mother of path dependencies: Toward a cross-cultural theory of corporate governance systems” (2001) 26 Delaware Journal of Corporate Law 147Google Scholar.

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44 The institutional environment includes such things as the political environment, the capital market, the labour market and the legal systems, all of which are part of societal norms. See Humphries, A and Whalen, C “National culture and corporate governance code” (2017) 17/1 International Journal of Business in Society 152Google Scholar.

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47 The collective nature of the German system restricts excessive risk-taking and high executive remuneration, thereby promoting the stability and long-term sustainability of corporations. See Li, J and Harrison, JR “National culture and the composition and leadership structure of board and directors” (2008) 16/5 Corporate Governance: An International Review 375Google Scholar.

48 Ibid.

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50 Id at 10.

51 Ibid.

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59 Ibid.

60 See generally Mande, V et al. “Equity or debt financing: Does good corporate governance matter?” (2011) 20/2 Corporate Governance: An International Review 195Google Scholar.

61 Chang, X et al. “The effect of auditor quality on financial decisions” (2009) 84 Accounting Review 1085CrossRefGoogle Scholar.

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78 Licht, A “Cross-listing and corporate governance: Bonding or avoiding?” (2003) 4/1 Chicago Journal of International Law 141Google Scholar.

79 Ibid.

80 A Bris and C Cabolis “Corporate governance convergence by contract: Evidence from cross-border mergers” (2002) Yale School of Management Working Papers 293. Companies may incorporate in countries or states with friendly corporate governance rules. For instance, in the US, Delaware accounts for almost 60% of all incorporations. This may not be unconnected with the fact that a switch to incorporation in Delaware has a positive effect on corporate value. Under international law, when a foreign corporation acquires 100% of a domestic firm, the nationality of the firm changes. Hence, the target corporation usually adopts the accounting standards, disclosure practices and governance structures of the acquiring firm. See Pagano, M et al. “The geography of the equity listing: Why do companies list abroad?” (2002) 57/6 Journal of Finance 2651CrossRefGoogle Scholar; Daines, R “Does Delaware law improve the firm value?” (2001) 62/3 Journal of Financial Economics 525CrossRefGoogle Scholar.

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82 Ibid.

83 Searcy, C “Corporate sustainability performance measurement system: A review and research agenda” (2012) 107/3 Journal of Business Ethics 239CrossRefGoogle Scholar.

84 Ntongho “Culture and corporate governance”, above at note 45.

85 Ibid.

86 Ibid.

87 Ibid.

88 In Japan, “Keiretsu” is a set of companies with interlocking business relationships and shareholdings: a conglomeration of businesses linked together by cross-shareholdings that form a robust corporate structure.

89 Koke, J “The market for corporate control in bank-based economy: A governance device?” (2004) 10/1 Journal of Corporate Finance 53CrossRefGoogle Scholar.

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91 See Branson, D “The very uncertain prospect of ‘global’ convergence in corporate governance” (2001) 34/2 Cornell International Law Journal 321Google Scholar.

92 Ibid.

93 See Becht, M and Boehmer, E “Voting control in German corporations” (2003) 23/1 International Review of Law and Economics 1 at 1–2CrossRefGoogle Scholar; Boehmer, E “Business groups, bank control and large shareholders: An analysis of German takeovers” (2000) 9/2 Journal of Financial Intermediation 117CrossRefGoogle Scholar.

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95 N Ofo “Much ado about independent directors in Nigeria” (2011) International Company and Commercial Law Review 250; Osemeke, N and Osemeke, L “The effect of culture on corporate governance practices in Nigeria” (2017) 14/4 International Journal of Disclosure and Governance 318CrossRefGoogle Scholar.

96 The collective nature of German corporate culture is determined in co-determination law, which allocates seats to employees on the supervisory board: du Plessis “An overview of German business”, above at note 29 at 1–4.

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98 Abels, P and Martelli, T “Corporate governance and transparency” (2013) 7/1 Journal of North American Management and Society 1Google Scholar.

99 CH Yun Tan “The one-tier and two-tier board structures and hybrids in Asia: Convergence and what really matters for corporate governance” (May 2014) at 4, available at: <https://www.ssrn.com/abstract=2140345> (last accessed 3 September 2019).

100 Seki and Clarke “The evolution of corporate governance”, above at note 32.

101 T Hiura and J Ishikawa “Corporate governance in Japan: Board membership and beyond” (February 2016) Bain Insights, available at: <http://www.bain.com/publications/articles/corporate-governance-in-japan-board-membership-and-beyond.aspx> (last accessed 3 September 2019).

102 Gilson, R and Milhaupt, J “Choices as regulatory reforms: The case of Japanese corporate governance” (2005) 53/2 American Journal of Comparative Law 343CrossRefGoogle Scholar.

103 Ibid.

104 Ibid.

105 Ibid.

106 Fagbayibo, B “Towards the harmonisation of laws in Africa: Is OHADA the way to go?” (2009) 42/3 Comparative and International Law Journal of Southern Africa 309Google Scholar.

107 See Faria, J “Future directions of legal harmonisation and law reform: Stormy seas or prosperous voyage” (2009) 14/1–2 Uniform Law Review 5CrossRefGoogle Scholar.

108 In the EU, harmonization aims at the formation of a common set of rules characterized by directives designed to allow for differentiation by member states, contextualizing the union-level legislative arrangement in local practice, including the possibility of opting out of the order: Ferreira, N “The harmonisation of private law in Europe and children's tort liability: A case of fundamental and children's rights mainstreaming” (2011) 19/3 The International Journal of Children's Rights 571CrossRefGoogle Scholar.

109 The EU minimum harmonization concept began with the notion of the Single European Act and has been particularly prominent since Maastricht, with its gains of allowing flexibility and diversity in the regulatory system. The Maastricht Treaty created the European Union and the so-called “three-pillar” structure consisting of the European Communities, a common foreign and security policy, and police and judicial cooperation in criminal matters. See Steiner, J and Woods, L EU Law (10th ed, 2009, Oxford University Press)Google Scholar.

110 North, D “Economic performance through time” (1994) 84 American Economic Review 359Google Scholar.

111 Practice shows that the EU harmonization effort has tried to shape a mutual pattern comprising best practices from the Anglo-American and continental models. Similarly, many international agencies encourage hybrid convergence by arguing for the common standard to be adopted, but previous theoretical development does not seem to indicate that even the move towards best practices can absorb all possible variations. However, from the standpoint of strong voices, one might be tempted to argue that, with the desired end result of harmonization still unclear in the field of corporate governance, it is doubtful whether minimum harmonization is attainable in short-term.

112 Keay, A “Harmonisation of avoidance rules in European Union insolvencies: The critical elements in formulating a scheme” (2018) 69/2 Northern Ireland Legal Quarterly 85Google Scholar.

113 Directive No 70/458/EEC, art 3, para 1.

114 Until the end of 1974, 30 out of a total of 70 acts involving the harmonization of laws enshrined total harmonization. Thereafter, total harmonization has been restricted to a few legal areas, such as product standards.

115 See Council Directive 70/157 of 1970, art 2.

116 P Slot “Harmonisation” (1996) 21 European Law Review 378 at 378–79.

117 Ibid.

118 Ibid.

119 Balancing Rules and Flexibility for Growth: A Study of Corporate Governance Requirements Across Global Markets: Phase 2 - Africa (2017, KPMG-ACCA) at 11, available at: <https://home.kpmg.com/content/dam/kpmg/sg/pdf/2017/06/balancing-rules-and-flexibility-for-growth.pdf> (last accessed 3 September 2019).

120 State of Corporate Governance, above at note 36 at 114–15.

121 Clark, T “Cycles of crisis and regulation: The enduring agency and stewardship problems of corporate governance” (2004) 12/2 Corporate Governance International Review 153 at 153–57CrossRefGoogle Scholar.

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127 Ibid.

128 Ibid.

129 Ibid.

130 Unlike standard harmonization, where prescriptive rules and procedures are imposed, the “comply or explain” approach is a non-binding co-ordination tool strategically crafted in corporate governance that is partly based on self-regulation. It is derived from formulated reports and recommendations that have over time metamorphosed into a code of practice.

131 The Sarbanes-Oxley Act (SOX) (Public Law 107, 116 Stat 745, enacted 30 July 2002), officially called the Public Company Accounting Reform and Investor Protection Act, is an act passed by US Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. SOX mandated strict reforms to improve corporate financial disclosures and prevent accounting fraud. Furthermore, in the aftermath of the global financial crisis of 2007–09, the US enacted a comprehensive new law to deal with its financial institutions and investors entitled the Dodd Frank Wall Street Reform and Consumer Protection Act 2010. Title IX (secs 901–91) of this act (“Investor protections and improvements to the regulation of securities”) further strengthened the role of the US SEC relating to corporate governance issues.

132 Since the Cadbury Report in 1992, above at note 9, over 50 codes have been introduced and adopted in different countries. The Cadbury Report has been superseded by many successive reports culminating in a Combined Code and the current UK Code. See V Magnier “Harmonisation process for effective corporate governance in the European Union: From a historical perspective to future prospects” (2014) 41/1 Journal of Law and Society 1.

133 The current version of the UK Code (formerly the Combined Code) is available at: <https://www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-d2f4f48069a2/2018-UK-Corporate-Governance-Code-FINAL.PDF> (last accessed 3 September 2019).

134 The new code applies to accounting periods starting on or after 17 June 2016 and applies to all companies with a premium listing of equity shares regardless of whether they are incorporated in the UK or elsewhere.

135 Companies with reporting periods beginning before 17 June 2016 should continue to report against the 2014 Code but, in the spirit of co-ordination and coherence, they are encouraged to consider whether it would be beneficial to adopt some or all of the new provisions in the revised code earlier than formally expected.

136 CJ Milhaupt “Evaluating Abe's third arrow: How significant are Japan's recent corporate governance reforms?” (2017, Columbia Law and Economics working paper no 561) at 1–4.

137 Further corporate governance strategic framework relating to harmonization is contained in the EU Commission Action Plan. EU company law applies in principle to most EU limited liability companies, while EU corporate governance rules only apply to companies listed on a stock exchange. See European Commission “Action plan: European Company law and corporate governance: A modern legal framework for more engaged shareholders and sustainable companies” (12 December 2012), COM (2012) 740 final, available at: <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012DC0740&from=EN> (last accessed 3 September 2019).

138 While the directives and recommendations apply in some areas, the mandatory aspect of the code was enforced in 2000 in the UK through the Listing Rules before the framework was introduced in the EU. The mandatory aspect only requires companies to offer reasons for non-compliance.

139 See 2006/46/EC, art 46(a).

140 This divergence is particularly prominent where a company is registered in one state but its shares are listed in one or more states. The UK Listing Rules contain the “comply or explain” regime and apply to all listed companies in the jurisdiction no matter the place of incorporation. However, in some other jurisdictions, such as the Netherlands, the obligation to adopt a code-based approach is enshrined in company law and applies to local companies listed in the regulated market on the basis of their place of incorporation. The practical effect of this is that a company risks being regulated by both the place of incorporation and the country where it is listed. The fact that companies could totally avoid procedural harmonization basically weakens any possible move towards convergence. See S Arcot et al “Corporate governance in the UK: Is the comply-or-explain approach working?” (2010) 30/2 International Review of Law and Economics 193.

141 Belgian laws permit shareholders to demand some explanations from company boards of directors by inserting an item in the agenda of the general meeting that could effectively require the board to account to the company how it has complied with the corporation's corporate governance practices. Such a requirement can increase the level of adherence to the code of best practices by the board and ultimately enhance the firm's performance. See Magnier “Harmonisation process”, above at note 132 at 1.

142 The Nigerian SEC Code of Corporate Governance Practices was developed in 2003 (the code has now been replaced by the 2011 code) based on a unitary board structure (as is the case with the UK and US) with an emphasis on the identified triple constraints: the role of the board of directors and management; shareholders rights and privileges; and the audit committee.

143 Ibid.

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147 Private Sector Code 2016, art 2.1.

148 Public Sector Code 2016, art 5.

149 Not-For-Profit Code 2016, art 7.1–7.2.

150 Osemeke, L and Adegbite, E “Regulatory multiplicity and conflict: Towards a combined code on corporate governance in Nigeria” (2016) 133/3 Journal of Business Ethics 431CrossRefGoogle Scholar.

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158 See OECD Corporate Governance Factbook (2019, OECD) at 15, available at: <https://www.oecd.org/daf/ca/Corporate-Governance-Factbook.pdf> (last accessed 3 September 2019).

159 See SOX, secs 401–09.

160 The failure of Enron and Worldcom, in part, informed the enactment of SOX.

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163 See Kaplow “Rules versus standards”, above at note 152 at 559–60.

164 See Ford “New governance, compliance”, above at note 153 at 8–9.

165 See also OECD Corporate Governance Factbook, above at note 158 at 15.

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168 OECD Corporate Governance Factbook, above at note 158 at 15.

169 S Apampa “Is there a right corporate governance framework for Nigeria?” (5 July 2014) Premium Times, available at: <http://www.premiumtimesng.com/opinion/164425-is-there-a-right-corporate-governance-framework-for-nigeria.html> (last accessed 3 September 2019).

170 Nwachukwu “Capital market investors”, above at note 12.

171 Ibid.