Institutional shareholder activism in Nigeria

Abstract

Purpose

The purpose of this paper is to investigate institutional shareholder activism in Nigeria. It addresses the paucity of empirical research on institutional shareholder activism in sub-Saharan Africa.

Design/methodology/approach

This study uses agency theory to understand the institutional shareholder approach to shareholder activism in Nigeria. The data are collected through qualitative interviews with expert representatives from financial institutions.

Findings

The findings indicate evidence of low-level shareholder activism in Nigeria. The study provides empirical insight into the reasons why institutional shareholders might adopt an active or passive approach to shareholder activism. The findings suggest the pension structure involving two types of pension institutions affects the ability to engage in shareholder activism.

Research limitations/implications

The research study advances our understanding of the status quo of institutional shareholder activism in an African context such as Nigeria.

Practical implications

The paper makes a practical contribution by highlighting that regulators need to consider how the financial market conditions and characteristics affect effective promotion of better governance practices and performance through shareholder activism.

Originality/value

This study draws attention to the implication for shareholder activism of complexities associated with an institutional arrangement where two types of financial institutions are expected to operate and manage the private pension funds in a country.

Citation

Uche, C., Adegbite, E. and John Jones, M. (2016), "Institutional shareholder activism in Nigeria", Corporate Governance, Vol. 16 No. 4, pp. 680-692. https://doi.org/10.1108/CG-12-2015-0172