Dear members, friends and partners, as we reflect on our 20-year journey so far at the Society, we have been examining how corporate governance has evolved. Over the past two decades, conversations around corporate governance have grown increasingly complex and urgent. While many organisations have made significant progress in strengthening board oversight and ethical leadership, high-profile failures have, and will continue to, expose deep weaknesses in the systems meant to prevent them. In this article, we’ll look at some of modern history’s worst corporate governance shortcomings.

As the Society for Corporate Governance Nigeria (SCGN) prepares to celebrate its 20th anniversary, we believe that this moment is an opportunity to consider what the global corporate landscape has taught us about vulnerability, responsibility and reform. The cases below are drawn across industries from all over the world, but reveal consistent themes: passive boards, suppressed accountability, misplaced trust and ethical compromise. If we are to build institutions that last, then these are lessons we must not ignore.

1. Enron Corporation (United States, 2001): The Dangers of Passive Oversight

This list has not been curated in any particular order. However, we are starting with one of the most significant corporate failures in modern history: The collapse of Enron. Enron was hailed as one of the most innovative companies in America. With a market value of over $60 billion, it was a dominant player in the energy sector. But beneath the surface, Enron was deeply entangled in complex and shady financial practices, using off-balance-sheet entities to hide debt and inflate profitability. Unfortunately, its board of directors, aware of these financial malpractices, failed to question their long-term implications. Executives reassured the board with technical jargon and favourable audits, which further lulled them into complacency. The result was a façade of financial health masking an unsustainable reality.

Unfortunately, in December 2001, Enron filed for bankruptcy. The company’s fall wiped out shareholder wealth, triggered mass layoffs, and devastated employee pension funds, many of which were heavily invested in Enron stock. Its auditor, Arthur Andersen, was also implicated and later dissolved. The Enron scandal was a pivotal event that led to the enactment of the Sarbanes-Oxley Act of 2002, aimed at enhancing corporate accountability in the United States.

What Should We Learn:

• Board independence is not optional. Directors must challenge complex financial strategies with diligence. When they are in doubt, they need to speak out.
• Oversight requires courage. A boardroom without critical voices is vulnerable to manipulation.
• Transparency is foundational. Misleading stakeholders destroys credibility, trust, and long-term sustainability.

2. Volkswagen (Germany, 2015): Performance Without Ethical Boundaries

It was discovered that Volkswagen had installed software that enabled diesel vehicles to cheat emissions tests, a scandal that affected millions of cars worldwide. Now, what allowed this deception? VW’s internal culture discouraged dissent, and leadership prioritised market dominance and performance metrics above integrity. Board members and top executives were insulated from accountability, and engineers reportedly feared questioning decisions from the top.

The scandal, dubbed “Dieselgate,” rocked the auto industry. Volkswagen faced over $30 billion in fines, legal settlements, and recalls. Several top executives resigned or were prosecuted, and the company suffered severe reputational damage. VW has since reoriented its brand, investing in electric vehicles and sustainability initiatives, but recovery has been very hard-won.

What Should We Learn:

• Ethics cannot be an afterthought. Governance goes beyond compliance. It must be values-driven.
• Cultural reform is essential. When internal voices are silenced, organisations drift into risky territory.
• Boards must ask the right questions. Top-down decision-making without challenge breeds opacity.

3. Cadbury Nigeria Plc (Nigeria, 2006): Lapses in Financial Accountability

In the early 2000s, Cadbury Nigeria was a leading company within the multinational Cadbury Schweppes group. The company enjoyed a strong market position and was highly respected within Nigeria’s manufacturing and FMCG sectors. However, a Reuters report stated that in 2006, Cadbury Nigeria publicly disclosed that it had overstated its financials by over ₦13 billion, spread across several years.

This revelation followed a whistleblower report and a subsequent internal audit that uncovered a pattern of financial irregularities. While the local management team had been responsible for the inflated results, the board was found to have failed in its supervisory role, trusting management without adequate verification or challenge.

Sadly, the fallout was immediate. Senior executives, including the managing director and finance director, were removed. Cadbury Schweppes initiated a governance overhaul, which included board restructuring, strengthening internal controls, and revising its reporting lines to ensure greater accountability across all regions. The scandal temporarily shook investor confidence in the company and raised serious questions about financial governance in Nigerian firms.

What Should We Learn:

• Boards must not outsource oversight. Even trusted executives require active monitoring and verification.
• Internal audit must be empowered. Audit functions should have independent access to the board through an audit committee. It must not be routed through management.
• Whistleblowing mechanisms work. Encouraging internal reporting and protecting whistleblowers are essential to revealing hidden risks.

A Nigerian Reflection

Most of these examples may be global, but the failures they represent are not foreign. Within the Nigerian context, similar patterns of board inaction, ethical compromise and weak oversight have undermined public and private institutions. They carry wide-ranging implications on investor confidence, employee welfare, public trust and economic stability.

As Nigeria, and other African countries, strengthen their corporate governance reforms, there is an urgent need for boards to move from formal compliance to genuine leadership. This includes:

• A commitment to independent thinking and questioning
• A culture of transparency and ethical accountability
• An insistence on adequate risk oversight and control systems
• Continuous capacity building for directors

Governance must be seen not as an administrative requirement but as a leadership imperative. It is what distinguishes institutions that endure from those that collapse under the weight of poor judgment.

Looking Ahead

At the Society for Corporate Governance Nigeria, our 20th anniversary is not only a celebration of longevity but a reaffirmation of purpose. These past two decades have revealed the importance of governance in shaping national development, corporate resilience and public trust.

We do not examine these failures to assign blame but to extract wisdom governance is a learning journey. Every boardroom must engage critically with past mistakes, not only to prevent recurrence but to foster institutions that are truly accountable to all their stakeholders.

Let this milestone strengthen our resolve to advocate for boards that are informed, principled and courageous. The future of corporate Nigeria depends on it.