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Undoubtedly, the corporation has become one of the most powerful forces in
twentieth century economies. It is both a method of property tenure and a means of
organizing economic life. The corporation’s separation of ownership into component parts,
control and beneficial ownership has brought into sharp focus the fundamental divergence
between shareholder and management interests. With sole proprietorships, the owners are
usually the same people who manage and operate the business. But in large companies,
corporate officers manage the business on behalf of the owners. This separation of ownership
and control creates a potential conflict of interests. In particular, managers may care about
their salaries, fringe benefits, or the size of their offices and support staff; or perhaps even
the overall size of the business they are running, more than they care about the shareholders’
profits. This agency problem caused by the separation of ownership and control has long
been a great concern globally. This is particularly so in the wake of mass corporate scandals
witnessed in the past couple of years. Just like any other country, Nigeria has faced the same
problem. In Nigeria, the Companies and Allied Matters Act, Cap. C20, LFN, 2004, was
enacted as the principal statute regulating the formation and management of companies. The
central tenets of the Act have been accountability, efficiency and objectivity on the part of
management. However, cracks are visible in many areas of the Act with gross attendant
consequences for directors. It is found out that the exercise of the powers as conferred by the
Act on the directors to direct and manage the business of the company is vulnerable to abuse.
This is particularly the case when directors are partially permitted to deal in contracts with
their own companies. There is therefore the need for amendment of the Act. This study
examines the relevant provisions of the Companies and Allied Matters Act, 2004 as well as
the two Codes of Corporate Governance for public companies in Nigeria using doctrinal
method. The objective is to ensure that there is corporate accountability.



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