The Legal Imperatives of the Removal of the Chief Executive Officers of Banks by the Central Bank Governor in Nigeria

Man in ordinary state of nature is brutish. Thus, in every human endeavour, the need arises for adequate safeguard against possible harm, loss or damage occasioned by man’s inordinate ambition to improve his lot. The concept of corporate personality emerged through the combined effects of socio-economic and legal engineering. The corporation as an artificial legal entity became a key player in the corporate world, distinct from the individual stakeholders. Subsequently, men became potential victims of their own ingenuity with the result that the corporate personality became instruments of fraud against the bulk of the members of the society and the stakeholders. However, the corporation as a legal fiction, is incapable of performing any function save through the instrumentality of human persons -- the officers and agents, viz; the directors and other principal officers of the company. Therefore, the growth and survival of any organization is contingent upon maintaining a balance between the two sets of power (the power of equity holders -- money power, and the power of the managers who manage a given corporate organization. Evidently, not all the investors can participate actively in the management of the corporation. The management of the corporation is not too infrequently entrusted in the hands of the directors and other salaried officers of the company. Hence, the needs for adequate protection of the investors’ interests who by law, are entitled to look after their investments. Equally important is the necessity occasioned by legal and economic realities of the time, for adequate protection against economic melt-down and financial crises which may at times require the intervention of regulatory authorities to salvage the situation. Such was the precarious situation with some banks in Nigeria recently when the Central Bank Governor intervened and removed the chief executive officers of the affected banks. It is against the backdrop of the furors generated by the action of the Central Bank Governor and the legal issues involved that this article has emerged