Moral Person –Moral Manager: Unveiling the nexus between Ethical Leadership and Corporate Governance Effectiveness of Public Interest Entities (PIEs) in Nigeria

Abstract

Corporate success, prosperity, and sustainability among others are strongly linked to the ethical stance of business managers and corporate governance effectiveness. Underpinned by institutional theory, this qualitative study investigated the nexus between ethical leadership and corporate governance effectiveness of Public Interest Entities (PIEs) in Nigeria. This study adopted qualitative inductive technique, specifically, interpretivist research paradigm. Semi-structured interviews served as data collection method. The study sample size consisted of 20 corporate governance key players in PIEs, consisting of regulatory authorities (Central Bank of Nigeria, Nigerian Deposit and Insurance Corporation, Security and Exchange Commission, and National Insurance Commission), consulting organisations and shareholders of Public Interest Entities in the banking and insurance sectors. The nature of the sampling technique is multistage comprising purposeful and convenience sampling methods. Content analysis was used to analyze the data gathered from the participants. Findings of the study revealed that corporate governance practices in Nigeria no doubt have gained growing recognition, but it is still evolving. The views of the participants revealed poor board practices, transparent disclosure, weak control environment and board commitment, which propel huge complications in effectively managing both internal and external environment. In addition, participants expressed that corporate governance effectiveness is driven by leaders who are passionate about doing the right thing for the right reasons. Effective corporate governance will be impossible to achieve and maintain in the absence of Chief Executive Officers (CEOs) who will imbibe and demonstrate high level of ethical stance. The study concludes that it is unmanageable to discuss corporate governance effectiveness in the absence of leaders that are moral and ethical, because such behavioural dispositions are very essential to corporate governance effectiveness.  Based on the findings, the study recommends that PIEs should increase focus on the need to employ and develop leaders who view ethical conduct as a fundamental aspect of their lives and then demonstrate such in the way and manner they lead and manage corporate entities.