DIRECTORS' LIABILITY FOR CORPORATE MISCONDUCT IN NIGERIA: A COMPREHENSIVE LEGAL ANALYSIS OF FIDUCIARY DUTIES, STATUTORY OBLIGATIONS, AND JUDICIAL PRECEDENTS IN THE MODERN CORPORATE GOVERNANCE FRAMEWORK

Abstract

The evolving landscape of directors' liability for corporate misconduct in Nigeria has undergone a dramatic transformation, triggered by fresh provisions ushered in by the Companies and Allied Matters Act 2020 (CAMA 2020) and an enhanced regulating framework. Technical legal literature tackles the confluence lines of fiduciary duties, statute law, and individual responsibility as envisioned under the theory of the corporate veil, and comparatively new law on director responsibilities. It is established in the study that the Nigerian courts have increasingly developed, defined, and advanced the rate of personal liability on the basis of already established principles of a fiduciary duty to balance the freedom of entrepreneurship and the protection of stakeholders. Improved legal clarity, as well as increased standards of due diligence and care due to key statutory provisions such as those in sections 305-318 of CAMA 2020, have led to a clarification of the legal landscape of director’s accountability due to corporate failure as well as increased standards of due diligence and care. Implementation challenges, on the other hand, still remain in terms of the adequacy of director insurance frameworks and the harmonization of civil, criminal, and regulatory enforcement mechanisms with regard to director accountability due to corporate failure. The argument indicates that strengthening corporate governance training procedures, introducing extensive director responsibility insurance policies, and statutory provisions are possible ways of improving accountability without jeopardising the competitiveness of the corporate environment in Nigeria.