ADOPTION OF VOLUNTARY GLOBAL GOVERNANCE INITIATIVES: EQUATOR PRINCIPLES AND BANKS IN NIGERIA

Abstract

Due to the growing level of dissatisfaction with the traditional models of governance established by the state, international governance initiatives have attracted more attention. This exploratory study is aimed at finding out the level of awareness and adoption of one such initiative, the Equator Principles (EPs), by banks in Nigeria. These principles were said to represent a good standard where environmental and social risks inherent in development projects can be identified, assessed and managed. The study was anchored on two theories: The club theory and the theory of institutional isomorphism. The survey data were gathered from 124 managers of the leading 10 deposit money banks in Nigeria. Data were analyzed using descriptive statistics presented in frequency tables and percentages. The findings show a high level of awareness of the EPs among the banks in Nigeria, but a low level of adoption. Although the study is limited by a small sample, it offers evidence that difficulties in measurability of benefits of adopting Equator Principles and lack of enforcements of sanctions for noncompliance seriously limit the number of financial institutions adopting the regime in Nigeria.