CUSTOMERS PERCEPTION OF TERMS AND CONDITIONS AND CORPORATE GOVERNANCE IN NIGERIAN BANKS

Abstract

The series of bank failures reminiscent of pre-consolidation scenario were attributed to weak regulations and brought about questions as to why Nigerian banks kept experiencing these corporate governance failures in spite of new corporate governance codes. It would appear that the banking industry is not sufficiently committed to corporate governance ideals considering history of instability in the industry. A critical area of governance is that which relates to Terms and Conditions guiding the customer-banker relationship. The Terms and Conditions are here narrowed down to the three pillars of corporate governance as follows: Effective Communication,
Transparency and Accountability. This study underscored the importance of customers as one of the stakeholders with direct impact, and determined their perception of how banks are committed to governance codes relating to Terms and Conditions. It used primary data obtained from the administration of questionnaire to 5,200 customers of 13 banks in Nigeria. The questionnaire was adapted from the provisions of the Chartered Institute of Bankers of Nigeria [CIBN] (2014) Code of Corporate Governance on conducts expected of banks relating to Terms and Conditions, which by extension border on effective communication, transparency and accountability; and analysis of descriptive statistics was done. Customers rated Accountability higher than both Transparency and Effective Communication in the activities of the banks. The least rating was on Transparency. This suggests that there is a higher need to improve on transparency in banks, followed by effective communication. Banks should consider enhancing the current framework for communication and disclosure. An extended disclosure framework will improve customers perception of transparency.