EFFECT OF ETHICAL LEADERSHIP ON CORPORATE GOVERNANCE, PERFORMANCE AND SOCIAL RESPONSIBILITY: A STUDY OF SELECTED DEPOSIT MONEY BANKS IN BENUE STATE, NIGERIA

Kenneth Chukwujioke Agbim
International Journal of Community Development and Management Studies  •  Volume 2  •  2018  •  pp. 019-035

This study seeks to examine the effect of ethical leadership on corporate governance, corporate performance and corporate social responsibility in selected Nigerian deposit money banks.

Business ethics, corporate governance and corporate social responsibility developed as movements to check unethical and corrupt practices in organizations and by extension improve the performance of the organizations. However, the application of these measures has not yielded the desired results. This is evident in the number of top executives of corporate giants like Enron of the United States of America and Satyam of India that have been embroiled in unethical practices. In Nigeria, the corporate corruption and scandal involving top management of deposit money banks has given rise to mergers, acquisition and failure of some of the banks. Thus, this study argues that there is a missing link in the application of these measures. That missing link is ethical leadership.

The study employed survey research design. Stratified sampling technique was employed to select the respondents that completed the questionnaire. The generated data were analyzed using linear regression.

The study established that a robust organization can be developed by main-streaming corporate governance, corporate performance and corporate social responsibility using a nurtured ethical leader.

The results reveal that ethical leadership has significant positive effects on corporate governance, corporate performance and corporate social responsibility.

Management should show more commitment in the selection and development of leaders and followers. All the stakeholders should be equally involved in the formulation of corporate governance principles. A nurtured ethical leader should be employed to mainstream corporate governance, corporate performance and corporate social responsibility through the organizational culture.

The use of objective measures or better still subjective measures is suggested as a way of generalizing the present findings.

The findings of this study will expose deposit money bank stakeholders to the consequences of ethical and unethical practices. It will create in bankers the need to abide by ethical leadership and to be whistle-blowers. The findings are expected to engender more stern monitoring measures by the banks’ regulatory agency. These measures are further expected to ensure the reinvention of the banks’ organizational culture so much so that they will contain the core values of code of ethics, corporate governance, performance and social responsibility. The outcome of the study is expected to make the regulatory agency more proactive rather than being reactive to deposit money bank matters. This will consequently put a stop to the fall in the taxes accruable to government in the event of bank failure.

To generalize the findings for the whole of Nigeria, similar study should be conducted in other geopolitical zones of the country.

Ethical Leadership, Corporate Governance, Corporate Performance, Corporate Social Responsibility, Deposit Money Banks
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