BUSINESS FAILURE AND ACCOUNTABILITY CHALLENGES IN THE NIGERIAN CAPITAL MARKET: CAUSES, CONSEQUENCES AND THE WAY FORWARD

Abstract Business failure remains an important challenge to the development, stability and credibility of the Nigerian capital market. Although corporate failure may arise from legitimate commercial difficulties, persistent weaknesses in corporate governance, financial reporting, internal control, risk management, ethical conduct and regulatory compliance can increase the likelihood that corporate distress will become severe and difficult to reverse. The consequences extend beyond individual companies because shareholders may lose investments, employees may lose employment, creditors may experience losses, government revenue may decline and confidence in the capital market may deteriorate. This paper examines the relationship between business failure and accountability challenges in the Nigerian capital market. It adopts a conceptual review approach based on relevant corporate governance principles, regulatory documents, scholarly literature and institutional publications. The paper identifies weak corporate governance, ineffective boards, inadequate disclosure, financial reporting manipulation, poor internal controls, managerial opportunism, conflicts of interest, weak risk management, audit failures, regulatory compliance problems and ineffective enforcement as major accountability challenges. The paper argues that the existence of corporate governance regulations alone is insufficient unless directors, managers, auditors, regulators and other market participants are held responsible for compliance and misconduct. The Nigerian Securities and Exchange Commission has strengthened its governance framework, including requirements concerning board independence, disclosure and director tenure, while recent regulatory measures also seek to improve the resilience of regulated entities. However, gaps between regulatory requirements and actual implementation remain a concern. The paper recommends stronger enforcement, technology-driven regulatory surveillance, improved board independence, effective audit committees, enhanced financial disclosure, protection of whistle-blowers, greater accountability of directors and auditors, investor education and early-warning mechanisms for financially distressed companies. It concludes that sustainable development of Nigeria's capital market depends not merely on increasing market size and transactions but on building a culture of transparency, responsibility, ethical leadership and enforceable accountability.