Introduction
Oftentimes, during the journey of life, we are faced with difficult situations where reaching an agreement with an opposing party becomes demanding or even unattainable. In such scenarios, one of the most effective options is to embrace “negotiation”, otherwise referred to as bargaining.
Meaning and scope of negotiation
Negotiation can be described as any form of discussion entered into with a view to reaching an agreement or consensus. It takes place in a variety of circumstances, ranging from business transactions and contract agreements to mergers, partnerships, and wage disputes. It is also present in international diplomacy, relationship issues, claims settlements, conflict resolution, and even land disputes. Essentially, wherever two or more parties must reconcile competing interests, negotiation becomes indispensable.
“Beyond individual gains, negotiation contributes to institutional stability by fostering cooperation and reducing the likelihood of prolonged conflict.”
Approaches to negotiation
Negotiation is usually conducted through two main approaches: integrative bargaining and distributive bargaining. The first is built on the philosophy of a win–win relationship, where both sides seek mutually beneficial outcomes and aim for a long-term relationship. In this model, resources are flexible, and the interests of the parties often converge. The second approach, distributive bargaining, is rooted in a win–lose dynamic. Here, the relationship tends to be short-term, resources are fixed, and the interests of the parties are directly opposed.
Benefits of negotiation
When properly handled, negotiation produces a host of benefits. It helps parties reach binding agreements and resolve disputes while building stronger relationships in the process. It opens opportunities for learning and the development of new skills, improves communication, and enhances efficiency. In the workplace, it supports business success, strengthens confidence, and even allows individuals to discover hidden talents. Beyond individual gains, negotiation contributes to institutional stability by fostering cooperation and reducing the likelihood of prolonged conflict.
Understanding corporate governance
Corporate governance, on the other hand, focuses on the proper management of a company’s affairs in the best interest of stakeholders, including shareholders, lenders, regulators, government, creditors, competitors, and the wider public. In essence, it is the system by which corporate entities are effectively controlled and directed.
Until the early 2000s, corporate governance principles were largely unfamiliar in Nigeria, having originated mainly from North America and Europe. Today, however, these principles are central to organisational life. At its core, good governance is anchored on accountability, transparency, and independence of judgement. It requires integrity in financial reporting, fidelity to regulatory obligations, and a commitment to delivering value not just for shareholders but for all stakeholders connected to the entity.
Regulatory framework
Corporate governance in Nigeria is shaped by both domestic and international frameworks. Domestically, the Nigerian Code of Corporate Governance of 2018, issued by the Financial Reporting Council, provides the baseline. Other instruments, such as the SME Business Governance Guidelines, the CBN Prudential Guidelines for banks, and the Code of Corporate Governance for insurance companies, supplement this effort. In addition, the Companies and Allied Matters Act (CAMA) 2020 and the Banks and Other Financial Institutions Act (BOFIA) 2020 provide strong legal backing. Globally, Nigeria aligns with frameworks such as the International Corporate Governance Network (ICGN) and the Organisation for Economic Co-operation and Development (OECD).
Approaches to corporate governance
Two broad approaches dominate the practice of corporate governance. The rules-based approach is anchored on statutory provisions of law, while the principles-based approach, sometimes referred to as the framework approach, rests on shared professional standards and collective wisdom. Both approaches complement each other, ensuring that governance is not just about legal compliance but also about upholding best practices.
Read also: Strengthening corporate governance through effective audit committee oversight and supervision
Conflict resolution and the nexus with corporate governance
Conflict resolution, meanwhile, is the mechanism for addressing crises that arise in homes, religious organisations, politics, or the corporate world. Disagreements are inevitable, but sound corporate governance plays a vital role in minimising their frequency and intensity in the workplace. Through adherence to codes of ethics, compliance with global standards, prevention of fraud, early detection of risks, and reporting of infractions, governance structures often prevent disputes from escalating into crises.
This proactive role of governance establishes a natural link between it and both negotiation and conflict resolution. In practice, corporate bodies often rely on negotiation to resolve disputes, and in doing so, they lean heavily on governance structures. A good example lies in the role of audit committees, which negotiate on behalf of shareholders in the appointment of external auditors and in determining fair remuneration. Here, governance provides the framework, negotiation supplies the method, and conflict resolution ensures lasting harmony.
Gains of corporate governance
When implemented effectively, corporate governance yields transformative benefits for organisations. It encourages ethical behaviour among leaders, strengthens corporate reputation, and builds public trust. It also facilitates smoother decision-making, enhances reporting credibility, and supports long-term strategic growth by eliminating bottlenecks. Governance creates job security, reduces labour turnover, and ensures compliance with rules and regulations. It protects organisations from conflicts of interest, builds strong internal controls against fraud, retains competent board members, and helps mitigate risks. More broadly, it enhances access to capital, sustains organisational objectives, and instills accountability, financial discipline, and transparency. Ultimately, robust governance fosters a culture of peace, stability, and harmony among stakeholders, ensuring that organisations remain resilient in an unpredictable environment.
Conclusion
Corporate governance is not merely a regulatory obligation; it is a strategic imperative. Accountants, and by extension, professional accountants, are uniquely positioned to lead this charge by virtue of their training and ethical grounding. Whether serving as internal auditors, external auditors, or members of audit committees, their task is to uphold global best practices while maintaining integrity, objectivity, fairness, probity, transparency, and accountability. In a world where negotiation and conflict resolution are daily realities, the synergy with corporate governance ensures that organisations not only survive but thrive.
Dr Kingsley Ndubueze Ayozie FCTI, FCA is a Public Affairs Analyst cum Chartered Accountant by profession. He writes from Lagos.
