Proxy contests: Prospects and challenges for corporate governance in Nigeria

Abstract

The legal authority for management and direction of a company rests with the board of directors, whose duty it is to supervise the general course of business, and to use its powers in the best interests of the company. However, ultimate power resides in the shareholders as the board is brought into managerial office by them via elections in annual general meetings. Yet, whenever the shareholders are dissatisfied with the manner the board of directors is conducting and managing the affairs of the company, such management can be ousted through voting it out during another election. By this, shareholders need no longer be content to sit on the sideline and watch as their shares in a company plummet; they are rather standing up and holding management accountable. This study seeks to explore the theory and practice of 'proxy contest', investigates its application in some other jurisdictions, and considers its prospects and challenges with a view to adopting the practice into Nigerian corporate governance.

Keywords: Proxy contest, Corporate governance, Prospects, Challenges, Nigeria