© 2014 Research Academy of Social Sciences http://www.rassweb.com 115 Journal of Social Economics Vol. 1, No. 3, 2014, 115-123 An Analysis of Corporate Governance in the Nigerian Banking Industry: The Role of Ethics U. Joseph Nnanna 1 Abstract Since the global financial crisis of 2008 the Nigerian economy saw an unprecedented rise in its unemployment rate and laxity in corporate governance. Several bank executives were charged with corruption and embezzlement of depositors’ funds by the Economic and Financial Crimes Commission (EFCC). The researcher examined the banking industry using a qualitative approach. A combination of survey questionnaires, face to face, and phone interviews were conducted. The results of this study which examined the role of ethics in the Nigerian Banking industry among other things were generally mixed. Consequently, this study adds to the existing literature on corporate governance in developing countries. Keywords: Ethics, Corporate Governance, Professionalism, Banking 1. Introduction There has been much focus on corporate governance in the media and top management teams globally due to the recent global financial crisis of 2008. In the case of the Nigerian banking industry, the crisis has had a debilitating effect on the areas of unemployment and governance laxity. Ultimately this phenomenon was much needed to highlight the “true” state in the management of the banks in the industry. Between the years 2004 –2007 there was a financial boom in Nigeria. Depositors in most cases could receive 15 – 20 percent return on savings accounts. This however is an anomaly in most countries globally. Since the regulators ignored these activities, and the depositors were elated about their new found wealth, nobody wanted to ruin the “party”. After all, since the banks are making record profits, why shouldn’t depositors reap the benefit? The attributes of an efficient financial system are: stability, integrity, depth and breadth of financial products. Typically, the Nigerian financial system has been wanting in these attributes and the consequences are manifested in the apparent disconnect between the financial system and the real sector of the economy as well as the frequent crisis that have plagued the development of the banking industry in particular. The economic panic of 2008 revealed the fragile regulatory framework in the Nigerian economy highlighting the financial systems dominance by the banking sector which produced a paltry 3.5 percent of the country’s gross domestic product (GDP). Additionally, the performance of the Nigerian economy is generally undermined by the perception of corruption. During the financial crisis, several bank executives from several banks were charged with corruption and embezzlement of depositors’ funds by the Economic and Financial Crimes Commission (EFCC) (Aminu & Akinsuyi, 2009). These allegations have given greater impetus among policy makers and regulators in Nigeria on the importance of good corporate governance practices. In general, the collapse of numerous financial institutions during the financial crisis has been attributed to among other things weak corporate governance. As Kama and Chuku (2009) argued that effective practice of corporate governance would have ensured efficiencies in the management of companies’ balance sheets and prevention of insider trading in Lever Brothers and Cadbury in Nigeria. Consequently the aim of this 1 Division of Business Administration Northwestern Oklahoma State University 709 Oklahoma Blvd Alva, OK 73717