Abstract

when investors decide to buy shares or stocks in any company, there is the initial presumption that the company would in turn make profits which would then be delivered to them based on their investment. However, more often than not, there are cases where investors are faced with the situation whereby their investments could go down the drain due to bad corporate governance practices of the companyies in which the investments are made. Bad corporate governance practices and indeed control fraud have led to insider abuse whereby directors have failed to perform their fiduciary duties in proper management of the companies#x2019; assets. These problems could be further compounded by the ignorant or complacent nature of shareholders with regards to their rights and responsibilities. In Nigeria, it can be said that shareholders are mainly faced with the problem of ignorance and in cases where they are actually aware of their rights; there is a passive nature of inexperience as to best approach possible in the circumstances. That notwithstanding, the recent banking crisis in Nigeria which is the subject matter of this paper has created a lot of awareness relating to shareholder activism in the country. These are seen in forms of Policies, Regulations and Scholarly Articles aimed at educating shareholders of their rights and responsibilities in the company. In view of this, it is the focus of this chapter to examine the extent to which shareholders can be said to have contributed to the banking crisis in Nigeria, taking into account the first five banks declared by the CBN as financially unstable. These are Oceanic Bank, Intercontinental bank, Union bank, Afri bank and Finbank. The paper will commence with an analysis of the concept of ownership and control, examining the agency problem associated with director-shareholder relationships. This will then be followed by an investigation of the legal position of shareholders rights and responsibilities in Nigeria, using the Compan