The Hidden Clauses Most Small Business Owners Miss in CAMA

In Nigeria, most small business owners see the Companies and Allied Matters Act (CAMA) as a document that only matters at the point of registration. Once the company name is approved and the certificate is issued, compliance usually ends there. But CAMA goes far beyond incorporation. CAMA is the foundation of corporate regulation in Nigeria. It defines what a company is, who can own it, who can manage it, and how it must relate to government agencies, creditors, employees, and shareholders. The Act was first introduced in 1990 and later overhauled in 2020 to reflect modern business realities, including digital registration, electronic filings, and single-director companies.

However, despite these reforms, many micro, small, and medium enterprises (MSMEs) still fall short of compliance. The reason is simple: most owners do not take time to understand the less obvious parts of the law, the clauses that do not appear in everyday discussions but have significant implications when ignored. These are the hidden clauses that quietly determine whether your company stays in good standing or slips into legal risk.

Let’s look at some of the most commonly missed ones.

1. The single-shareholder company rule and its limits

One of the most celebrated changes in the 2020 amendment is that a private company can now have just one shareholder and, in some cases, a single director. This change was made to simplify incorporation for entrepreneurs who want to start small.

However, this flexibility has boundaries. If the number of directors or members falls below the legal minimum and remains that way for too long, the remaining officers may be held personally liable for any debts or liabilities incurred during that period. Many owners are unaware of this. They assume incorporation automatically protects them from personal liability, forgetting that this protection only applies when the company operates within legal limits.

In simple terms, CAMA gives room for one-person companies, but it expects you to maintain the proper structure once your business grows.

 

2. Persons with Significant Control (PSC)

Another often-overlooked clause is the requirement to disclose Persons with Significant Control, usually anyone who owns, directly or indirectly, at least 5 percent of the company’s shares or voting rights.

The idea behind this clause is transparency. It ensures regulators and the public can identify who truly controls a company. Both the individual with control and the company have disclosure duties: the person must notify the company, and the company must in turn notify the Corporate Affairs Commission (CAC) within a specific timeframe, usually within 30 days.

Failure to do so attracts penalties, and continuous default may affect future filings or transactions. For small businesses where family members or silent investors hold shares informally, this clause becomes especially important. Every person who has real influence over the company should be properly documented and disclosed.

 

3. Registration of charges and protecting your security

If your company takes a loan and offers any of its assets such as land, equipment, or vehicles as security, that interest must be registered with the CAC within 90 days. This process is called the registration of charges.

Many small business owners skip this step because it feels like unnecessary paperwork. But failure to register a charge can render the security void against third parties, meaning your lender might not have a valid claim if something goes wrong. From a practical standpoint, registering charges protects everyone involved. It shows creditors that your company operates transparently and keeps its financial records credible.

 

4. Minimum membership and directorship

CAMA sets a minimum number of members and directors depending on the type of company. When your company continues to operate below that minimum, any debts or obligations incurred may become the personal responsibility of the remaining directors.

This clause is easy to overlook, especially when a partner resigns or passes away. The company continues operating informally, unaware that its structure no longer complies with CAMA. Regularly review your company’s directorship and membership records to ensure they meet the legal threshold.

 

5. Annual Returns and CAC compliance

Filing annual returns is not a formality; it is a legal requirement. Yet, many SMEs assume it is only for big corporations. Under CAMA, every registered company must file its annual returns to confirm it is still active.

Failure to do so attracts penalties, and persistent default may lead to the company being struck off the CAC register. The Commission has become stricter with enforcement, and in some cases, you may be unable to process other filings until the backlog is cleared. Filing your annual returns on time is one of the simplest ways to keep your business compliant and reputable.

 

6. Pre-emptive rights in Share Allotment

When a company wants to issue new shares, CAMA gives existing shareholders the first right to buy them before outsiders, unless the company’s articles say otherwise. This is known as a pre-emptive right.

The purpose is to protect existing shareholders from unexpected dilution of their ownership. For small businesses, this matters when you plan to bring in new investors or partners. Always review your articles of association and follow the procedure for share allotment to avoid disputes or liability for misuse of funds

CAMA imposes strict accountability on directors who misuse company funds. If money received for a specific purpose, such as a client deposit or a loan for a defined project, is used for something else, the director may be held personally liable to refund it.

This rule emphasizes proper corporate governance. Business funds should never be treated as personal property. Keeping clear financial records protects both the company and its officers.

 

8. Statutory records and virtual meetings

Even in the digital age, companies are still required to maintain statutory registers, including registers of members, directors, and charges, and to keep minutes of meetings.

CAMA now allows meetings to be held electronically, which is helpful for small companies operating remotely. However, such meetings must follow the procedures laid out in the company’s articles and the law. Virtual meetings are permitted, but not unstructured ones.

 

These clauses are not hidden in the sense that they are secret; they are hidden because most people do not read beyond the basic incorporation process. But they form the backbone of responsible business management. 

CAMA is designed not to punish business owners but to guide them toward transparency, accountability, and sustainability. Understanding these provisions helps you build a company that can stand up to legal and financial scrutiny, whether before regulators, investors, or in court. For small business owners, compliance should not be an afterthought. It should be part of how you do business every day. Because in the end, staying compliant is not about ticking boxes. It is about protecting the business you have worked hard to build.

At Nedellum Partners, we help startups and SMEs navigate complex regulatory frameworks like CAMA with ease. Through our Legal strategy, business consultancy, and B2B legal solutions, we guide businesses in structuring their operations, ensuring compliance, and protecting their interests. With the right legal foundation, your business can not only grow — it can endure!

 Why and How Weak Governance Sinks Great Ideas

Great ideas don’t fail only because of poor funding or competition. Many crumble from within, quietly, slowly, and often without anyone realizing it until it’s too late. Weak governance is one of the biggest culprits. At the start, most founders focus on building products, getting customers, or attracting investors. To them, governance feels like something to worry about later, a formal layer meant for big corporations, not agile startups. But the truth is, governance begins the moment decisions start being made. Who decides what? Who approves spending? Who’s accountable when things go wrong? These are governance questions.

Weak governance doesn’t destroy ideas overnight. It chips away slowly through confusion, unchecked authority, or poor communication. Over time, what began as a passionate mission becomes an exhausting cycle of blame, misalignment, and lost purpose. A real example of how weak governance can sink great ideas is 54gene, a Nigerian health-tech startup once celebrated for raising millions in investment and promising to revolutionize genomics research in Africa. Despite its early promise, the company shut down in 2023 amid reports of leadership instability and financial mismanagement. Frequent CEO changes and poor oversight were cited as key governance challenges that hindered its sustainability. 54gene’s story is just one among many others with strong potential but fragile structures that couldn’t support their growth.

 

Key Reasons Weak Governance Sinks Great Ideas

1. Weak leadership and lack of direction

Governance cannot thrive without strong leadership, even with proper systems in place. Founders set the tone for decision-making, ethics, and organizational culture. When leaders avoid difficult conversations, make impulsive choices, or fail to communicate a clear vision, the team loses direction. Weak leadership often trickles down, creating confusion, inconsistency, and burnout. Strong leaders, on the other hand, anchor governance with clarity, discipline, and purpose.

2. No culture of accountability

Ideas grow when people take responsibility. Weak governance creates the opposite, a system where no one feels answerable for outcomes. Deadlines slip, commitments fade, and mediocrity quietly takes root. Over time, even a strong team loses its drive when there’s no structure reinforcing accountability and integrity.

3. No Clear Decision-making Structure

When there’s no defined chain of accountability, decisions become slow, inconsistent, or arbitrary. Founders may assume that because the team is small, everyone can decide together. But as the company grows, that informality turns into confusion. Without a clear process, even the best ideas die waiting for approval or get derailed by conflicting opinions.

4. Lack of transparency and communication

When leadership isn’t transparent about decisions, trust breaks down. People start to guess instead of knowing what’s happening. Rumors replace facts, and silence becomes the norm. Weak governance thrives in that silence, and ideas that depend on collaboration start to fade under tension and uncertainty.

5. Blurred roles and responsibilities

Startups often begin with everyone doing a bit of everything. That’s fine early on, but chaos sets in when there’s no transition to defined roles. Weak governance makes it easy for overlaps, power struggles, or hidden resentments to form. People stop taking ownership because no one knows where their job ends and another’s begins.

6. Poor financial oversight

A brilliant product can’t survive poor financial management. Weak governance often shows up as unchecked spending, missing documentation, or unclear financial decisions. Without proper reporting and review systems, resources leak quietly. By the time the problem is noticed, the business is already in trouble, not because the idea was bad, but because there was no structure protecting it.

7. Ignoring Compliance and Legal Structure

Many startups overlook basic compliance such as filings, board meetings, or shareholder agreements until an investor asks for them. But governance is not just paperwork; it’s protection. Without it, founders risk personal liability, investor disputes, and regulatory penalties. Compliance ensures your idea isn’t just exciting but legally sustainable.

When governance is weak, the consequences ripple through every level of the business. Investors lose confidence. Teams lose motivation. Opportunities slip away because decisions take too long or are made without foresight. Internal conflicts multiply, and what once seemed like a thriving enterprise begins to crumble under poor coordination, mistrust, and burnout. In some cases, the damage goes beyond the company — suppliers, customers, and employees all pay the price for weak leadership and disorganization.

Unless founders see governance as part of innovation, not a threat to it, their ideas are unlikely to survive growth, change, and pressure. Strong governance keeps creativity grounded, finances transparent, and teams united under a shared vision. It turns ambition into something sustainable, a system that supports big dreams with discipline and direction. In the end, governance isn’t the enemy of great ideas. It is the anchor that keeps them from drifting away and the bridge that turns vision into legacy.

At Nedellum Partners, we help startups and SMEs build structures that keep their vision steady and their growth intentional. Through our legal strategy, business consultancy, and B2B legal solutions, we guide businesses in developing governance frameworks that strengthen accountability, protect creativity, and ensure long-term stability.

Because every great idea deserves more than a beginning — it deserves a structure that helps it last!

 

The Case for Delegation and Structure as Your Business Grows

The excitement of finally launching your business, after pitching, planning, and scrounging funds amidst doubts, failures, and discouragement, is an unbeatable feeling. It feels like you have finally broken the glass ceiling. But as your business grows, attracts more customers, and begins turning over profit consistently, you soon realise that the same strategies that worked at the start no longer fit. Your customer base has expanded, you need more help, and most importantly, you need a structured way to manage that help.

Growth means expansion, and expansion requires learning to trust others with certain tasks, allowing you to focus on higher-value activities. It is understandable to feel reluctant because trusting others with what you have built can feel risky, but delegation is far more than just assigning work.

Delegation refers to the degree to which you are willing to entrust authority to employees, allowing them to carry out specific tasks and granting them the power to access the necessary corporate resources. For SMEs, failing to delegate can eventually cause harm, as carrying the entire burden alone leads to exhaustion, missed opportunities, and stunted growth.

Why Does Delegation Matter?

Delegation is an important leadership skill that helps managers and professionals achieve their goals by assigning tasks and responsibilities to their team members. Understanding what delegation means in business, and knowing how and when to delegate, is central to effective management.

1. It allows leaders to focus on high-value work

When leaders delegate effectively, they free up time to handle tasks that truly match their expertise. Routine or administrative duties can be managed by capable employees, allowing leaders to think strategically and drive long-term growth. A business that practices this consistently performs better because everyone operates within their strengths without being micromanaged.

Read: Why Every Startup needs a System before it Scales

2. It speeds up decision-making

Delegation empowers employees to act without constantly waiting for approval. When responsibilities are clearly defined, decisions happen faster and closer to where the work is being done. This helps leaders maintain oversight without being pulled into every detail while giving employees confidence in their judgment.

3. It develops future leaders

Delegation is also one of the best ways to train and prepare emerging employees for greater responsibilities. By assigning tasks that challenge them, leaders help employees gain valuable experience and confidence. Over time, these experiences build capable professionals who are ready to step into leadership roles themselves.

4. It boosts motivation and morale

When employees are trusted with meaningful work, they feel valued and take pride in their contributions. This sense of ownership fuels motivation and engagement, creating a more committed and productive workforce.

5. It improves overall company performance

When work is properly distributed, teams operate more efficiently. Everyone understands their role, works within their area of expertise, and collaborates toward shared goals. The result is higher productivity, smoother workflows, and stronger performance across the board.

6. It builds trust across the organisation

Delegation encourages trust on both sides. Leaders learn to rely on their employees, and employees gain confidence in their abilities. This shared responsibility fosters better communication, teamwork, and unity.

The Importance of Organisational Design and Structure for SMEs

The structure of small and medium-sized businesses plays a vital role in their performance and long-term sustainability. A clear organisational design helps businesses operate efficiently, innovate, and remain competitive. It provides clarity, supports accountability, and ensures that growth is well managed.

1. Clear Roles and Responsibilities

Without structure, employees can become confused about who handles what. Questions like “Who is responsible for this?” or “Do I report to A or B?” can slow down work. Defining clear roles eliminates this confusion and boosts productivity.

2. Improved Communication and Faster Decisions

A well-structured organisation enables smoother communication and faster decisions. In small teams, information often gets lost or decisions bounce between people. With clear reporting lines, everyone knows who to consult and can act quickly. For example, a growing tech startup that introduces defined team leads and regular cross-department meetings will experience fewer delays and better collaboration.

3. Employee Involvement and Motivation

When employees understand their roles and have a voice in decision-making, they become more engaged and productive. Delegating meaningful responsibilities creates a sense of ownership and pride in their work. In SMEs, where every role matters, this level of involvement drives results.

4. Innovation and Competitive Advantage

An effective structure encourages creativity while keeping operations efficient. SMEs that balance centralised decision-making with team-level autonomy can quickly respond to customer needs. For instance, a manufacturing company that centralises finances but gives product teams room to innovate is likely to adapt faster and outperform competitors.

5. Sustainable Growth and Employee Development

A well-structured SME does not depend solely on its founder. When roles and systems are clear, the business runs smoothly even in their absence. Delegating responsibilities develops future leaders, ensuring the company can grow sustainably while maintaining quality and stability.

Conclusion

As SMEs grow, structure and delegation become the backbone of sustainable success. A strong organisational design brings clarity, enhances communication, and enables efficiency, while effective delegation empowers leaders to focus on strategic growth and employees to take ownership of their work. Together, they create the foundation for innovation, accountability, and long-term stability.

However, building these systems can be challenging, especially for startups that must balance growth, compliance, and daily operations. This is where Nedellum Partners comes in. We help startups and SMEs develop the legal, operational, and decision-making frameworks that drive sustainable growth. Through our Legal strategy, business consultancy, and B2B legal solutions, we guide businesses in creating structures that support scalability, strengthen governance, and enable founders to focus on what matters most: building companies that endure.

5 Ways Corporate Governance Secures Long-Term Company Sustainability by Aniero Gift

Most companies fail not because they lack ideas, but because they lack a plan to make them last. Corporate governance provides that plan. It sets clear rules, defines responsibilities, and ensures decisions are made with the long-term in mind. Without it, companies drift, react to problems as they come, and struggle to sustain growth.

 

 

Companies that embed governance into their operations can withstand challenges, build trust with stakeholders, and grow steadily over time. In short, corporate governance turns short-term wins into long-term success. Here are five ways corporate governance secures a company’s long-term sustainability.

 

1. Establishing a Clear Vision and Well-Defined Goals

Every company or organization needs a clear vision and set goals before taking action. Knowing what you want to achieve and where you are headed helps map out strategies for growth, future achievements, and long-term success. These goals should be written down somewhere accessible so they can be referenced whenever needed. Strategic planning ensures that these visions and goals are not just ideas but actively guide the company’s decisions and operations. Careful planning helps the organization stay focused and creates a roadmap for sustainable success.

2. Preparing the Company for Challenges and Uncertainties Ahead

Sustainable success requires anticipating and preparing for potential challenges. As the saying goes, “He that will build a house must first count the cost.” In business, this means planning for risks that could disrupt growth or success. By identifying potential problems and putting measures in place to manage them, companies can stay on course even when unexpected issues arise. Proper risk management is a key part of corporate governance, ensuring that challenges do not derail progress but instead become opportunities to strengthen the organization.

3. Maintaining Transparency Through Open Records and Honest Reporting

Owning a company does not mean you can operate outside the law. Even private companies must follow regulations, keep records, and report key information. Transparency means openly showing what is happening inside your company, including financial statements, decisions, and operations, so that stakeholders, regulators, and investors can trust the organization. Reporting makes transparency actionable, ensuring that all activities are documented and accessible for review. Together, transparency and reporting are core aspects of corporate governance, keeping the company aligned with legal requirements and providing a foundation for long-term, sustainable success.

4. Actively Engaging Stakeholders to Guide Decisions

A company is not an abstraction. It is made up of people, from shareholders to employees, whose voices matter. Directors and leaders cannot make decisions in isolation; they must actively listen to and consider the perspectives of all stakeholders. Corporate governance ensures that decisions are made responsibly, fairly, and in line with legal requirements, creating a system where the interests of those affected by company actions are incorporated. By engaging stakeholders, companies build trust, prevent conflicts, and create an environment where growth and success are sustainable, replicable, and supported by everyone involved.

5. Relying on Professional Expertise to Ensure Compliance and Sustainable Growth

Having a clear vision, transparent reporting, and accountability are essential, but it is not enough if a company does not follow the law or industry standards. This is where professional expertise comes in. Accountants, auditors, legal advisors, and experienced managers help ensure that the company operates within the law, follows proper governance practices, and maintains compliance with regulations. These professionals not only protect the company from legal risks but also help create systems and processes that make success sustainable, replicable, and scalable. In short, they turn good intentions into measurable, long-term achievements, ensuring that the company’s growth can be maintained and duplicated over time.

Conclusion

Sustainable growth is not a fiction. It is not something out of reach. It is possible, achievable, and workable when companies follow the right rules, embed proper compliance, and embrace the principles of corporate governance. Establishing clear visions, planning for risks, maintaining transparency, engaging stakeholders, and relying on professional expertise companies to build systems where success can be measured, maintained, and replicated over time. In the end, corporate governance turns ambition into lasting achievement, ensuring that sustainable growth is truly within reach.  

Why Every Startup Needs a System Before It Scales.

Scaling refers to the process of growing and expanding a business. Ultimately, there’s more money and so it equals more resources available for use. Scaling isn’t just a goal for startup founders; it’s the dream that drives them. More customers. More profit. Stronger teams. Global reach. All built on sustainable growth.

Many startups usually equate scaling to success  but this is seldom true especially when expansion shows the cracks. Any startup journey starts with the ability to persevere and the best tool to ensure that this happens is the ability to create a system that works.Startup founders all over the world will have to leverage different tools and processes that will provide value to their customers.

Often, Startup journeys focus on speed and expansion, and less on the structure which often becomes a pain when the startup begins to scale. The desire to scale is a noble one and the stage between when your startup begins operations and the time it knows it is ready to scale is what we call the growth stage. Scaling is often difficult because it requires significant funding and not all startups will be able to access venture capital funding. 

Difference between Growth and Scaling

Growth and Scaling may sound similar but they’re different. They both involve expansion, however, growth involves adding more resources like money for instance to make more revenue whilst Scaling means your revenue increases without needing to add more resources.

The Dangers of Scaling too Soon

One of the main reasons why startups fail is because they scale before it is time. The truth is not all growth is good growth and other times, you’re just scaling the wrong thing.

Premature scaling is one of the most common reasons startups fail. It often takes this format: 

• A shiny product that can’t keep users.
• A growing user base, but no paying customers.
• Expanding to new markets before putting down roots in your chosen niche.
• Hiring salespeople before proving your pitch works.

When you scale too early, problems aren’t fixed, they are multiplied. It’s like pouring water into a leaky bucket, no matter how fast you fill it, the holes will always win. Scaling without solid systems, will inevitably burn through your time, money, and energy.

Real growth doesn’t come from racing ahead. It comes from building something that’s ready to grow in a system that works which will ensure your  business can actually handle success.

Because scaling isn’t just about getting bigger.

It’s about getting better first.

The Chaos of a Startup that Lacks a System

If your startup lacks a system, it will create chaos. 

Without clear processes or defined roles, mistakes will be repetitive. Communication breaks down next. As the team expands, messages get lost between Slack, email, and meetings. What one person assumes is being handled turns out to have slipped through the cracks. 

Then comes burnout. Team members start feeling stretched thin because there’s no structure to support them. They spend more time fixing problems than building for the business. Customers begin to notice too. With no standard processes for onboarding or support, the customer experience becomes inconsistent and over time, 

What a System Looks Like in a Startup

In simple terms, a system is the backbone that holds a startup together as it grows. It can be as straightforward as a standardized workflow, a shared document outlining who does what, or an automated process that ensures tasks never fall through the cracks. Systems define how work gets done;  who is responsible for what, and how success is measured. As the business grows, systems adapt to new realities, helping teams stay aligned without stifling creativity.

The Key Systems Every Startup Needs Before Scaling

Before a startup starts hiring fast or expanding into new markets, certain systems must already be in place such as:

Operational System: this ensures work flows efficiently through documented processes, checklists, or automations.

Financial System: this helps the company track expenses and manage budgets to ensure accountability.

Team System: they onboard, take charge of communication and make it look seamless. 

Customer System: this uses tools like a CRM or structured support channels to keep customers satisfied and loyal.

Decision System: this will ensure that choices are data-driven and accountable, not made from guesswork or gut feelings.

How Systems Enable Sustainable Growth

Systems don’t just keep startups organized but they also make growth sustainable. With solid systems, efficiency rises and mistakes will drastically reduce. This way, founders can focus on strategy instead of putting out fires which will increase Investor confidence and customer retention. The right structure actually empowers creativity by removing uncertainty. Each small system reduces friction and frees up time for innovation and growth.

In conclusion,  Before asking, “How can we grow faster?”, ask “Are we ready to handle that growth?” Ask, “How strong are my systems?” Systems are what make that possible. Start with one small system today whether it’s operational, financial, team, customer or a decision system.

If your startup is struggling to build or refine these systems, you don’t have to figure it out alone. Nedellum Partners offers startups legal strategy, consultancy & resolution for businesses, and B2B legal solutions and will help you design the operational, financial, and decision-making frameworks that will support your sustainable growth. 

How to Recover Outstanding Debts in Nigeria

Recovering outstanding debts in Nigeria can be complex, time-consuming, and challenging, especially when informal recovery efforts fail. Many businesses, financial institutions, and individuals turn to professional debt recovery practitioners to help navigate this process efficiently and within the confines of the law.

At Nedellum Partners, we provide structured debt recovery services in Lagos and across Nigeria, assisting clients to reclaim outstanding amounts while complying with all applicable laws and ethical standards. Our work is guided by Nigeria’s legal framework, industry best practices, and professional ethics.

Understanding Debt Recovery in Nigeria

Debt recovery involves taking lawful steps to recover sums owed by a debtor to a creditor. In many cases, creditors attempt recovery themselves before engaging professional assistance. Professional debt recovery support can improve efficiency, ensure legal compliance, and reduce the burden on the creditor.

Our team is experienced in managing debt recovery matters across various industries — from commercial transactions to financial services — with an emphasis on resolving matters efficiently.

Information Needed for Debt Recovery

To assess and handle a debt recovery matter effectively, certain details are essential, including:

• The debtor’s name and address
• The amount owed
• How long the debt has been outstanding
• Copies of agreements or contracts
• Any correspondence acknowledging the debt
• Any disputes or claims from the debtor (e.g., product quality issues, delivery delays) - whether valid or not, so that they can be addressed appropriately.

Providing these details from the outset helps ensure that the process is both accurate and efficient.

Debt Recovery Under the STMA Act, 2017

Where a credit transaction falls under the Secured Transactions in Movable Assets Act, 2017, the Act provides specific recovery mechanisms. For example, if a borrower defaults, the creditor may issue written notice of default and intention to repossess collateral. Ten days after such notice, repossession can occur either:

• Through judicial processes, or
• Without court action if the borrower has consented in the security agreement

Repossession without judicial process may be supported by the Nigeria Police upon presentation of the relevant documentation. The sale of any collateral must comply with the Act’s provisions, respecting the borrower’s and other creditors’ rights.

Our Debt Recovery Process

At Nedellum Partners, debt recovery is handled methodically to improve the likelihood of success. Our typical process includes:

1. Initial Consultation & Agreement – Discussing the matter with the client (virtually or in person) and agreeing on the appropriate approach.
2. Demand Notice – Issuing formal written communication to the debtor.
3. Follow-up Communication – Telephone calls and further correspondence to negotiate repayment.
4. Deadline Notice – Providing a final opportunity for repayment before escalation.
5. Client Consent for Legal Action – Proceeding to litigation only with the client’s written approval.
6. Court Proceedings – Where necessary, instituting legal action to obtain judgment.
7. Enforcement – Executing the judgment to recover the debt.

This process may be adapted to suit each matter’s unique facts and applicable laws.

Scope of Services

Our debt recovery-related services in Lagos and across Nigeria include:

• Negotiations for settlement
• Asset tracing and recovery
• Enforcement of security interests
• Debt restructuring arrangements
• Review of credit and security documentation for lenders and borrowers

Why Clients Work With Us

• Nationwide Reach – We manage matters across all states in Nigeria.

• Tailored Strategies – Recovery approaches are designed for each case’s unique circumstances.

• Ethical Practice – All recovery efforts are conducted in compliance with Nigerian law and professional conduct rules.

• Experience Across Sectors – Our team includes legal practitioners and professionals with backgrounds in finance, credit management, and business advisory.

If you require assistance with a debt recovery matter in Lagos or elsewhere in Nigeria, you may contact Nedellum Partners for a confidential consultation.

Building a Corporate Governance Framework for Small but Growing Teams

Every business, regardless of size or stage, requires a corporate governance framework. Corporate Governance is not a luxury reserved for large corporations, it’s a foundational necessity. A corporate governance framework should be tailored to the scale and complexity of the firm, and delaying its implementation can lead to dire consequences. Therefore, creating a simple corporate governance structure early will prevent recurring conflicts and accelerate decision-making. Creating a corporate governance structure from the onset is essential to avoiding future losses.

Accountability is the lifeblood of a growing business, and corporate governance is the mechanism that ensures it. In the early stages, when systems are still being built and operations are vulnerable, corporate governance acts as a filter by removing ambiguity and laying the groundwork for sustainable growth. Among the many systems a startup must develop, a corporate governance framework is one of the most critical. The absence of corporate governance structure creates vulnerabilities that will ultimately lead to business collapse. Corporate Governance is not a constraint; it’s a strategic enabler.

Nigeria is a leading force in Africa’s startup landscape, with many thriving ventures  founded and led by Nigerians. Between 2021 and 2022, it has attracted significant funding, an impressive feat. However, by 2023, a concerning trend emerged: a wave of startup failures, often linked to mismanagement and inadequate governance structures.

What is a Corporate Governance Framework?

Corporate Governance frameworks shape how individuals engage with an organization and key stakeholders which serves as a mechanism to oversee and guide operations effectively. Despite their importance, nearly half of all companies, about 48%, still lack a formal governance structure.

At its core, a corporate governance framework provides the foundational infrastructure for managing entities and ensuring regulatory compliance. It functions as a pillar supporting the growth of various branches of lawful and ethical operations. Corporate Governance enables organizations to meet filing obligations and uphold standards in areas such as corporate culture. It also serves as a vital system of rules and protocols through which the board promotes fairness in both internal operations and external communications.

A corporate governance framework outlines the structure of rules that regulate an organization’s operations. It clarifies the responsibilities of key participants such as the board of directors, executives, shareholders, and stakeholders in ensuring overall accountability throughout the organization.

Corporate Governance Framework vs. Corporate Governance Structure

The terms are often used interchangeably to describe the system of rules that guide how an organization is directed and controlled especially by its leadership, such as executives and board members.

Read: 5 Ways Corporate Governance Secures Long-Term Company Sustainability

Step-by-Step Guide to Building a corporate Governance Framework

A strong corporate governance framework brings clarity, consistency, and accountability to organizational decision-making. Whether you're designing a company-wide system or focusing on a specific domain like AI or data, you can follow these essential steps:

1. Define Purpose and Scope

Ask questions like, “Why are we creating this framework?” Then clarify what is driving your need, is it regulatory or ethical standards? Then decide if it applies to the entire organization or a specific function.

2. Identify Stakeholders and Assign Roles

Start out by mapping out the individuals and teams responsible for designing the corporate governance framework. This typically includes board members, senior executives, technical leads as well as others, then you can define each person’s responsibility and what their levels of accountability and expectations should be. To formalize this structure, developing an organizational chart that outlines roles and responsibilities will definitely help in ensuring everyone understands their place within the governance system.

3. Develop Principles and Policies

Once roles are established, it’s time to focus on the values and rules that will guide decision making. Principles like as fairness. should form the foundation of your governance approach so you can draft policies that address critical areas like data usage, ethical deployment of AI, and board composition. These policies must align with both the organization’s culture and relevant legal and regulatory standards.

4. Design Processes and Decision Protocols

With guiding principles in place, the next thing is to define the operational workflows that support decision-making by outlining how new initiatives are approved, how conflicts are resolved, and what escalation paths exist. There should be clarity on who holds final decision-making authority and document these processes thoroughly. This reduces ambiguity and ensures consistent, accountable governance practices.

5. Set Controls, Metrics, and Accountability Tools

These include establishing key performance indicators (KPIs), audit mechanisms, and compliance checks. In addition, regularly assess performance and risk exposure, and create remediation pathways to address any issues that arise. These controls help maintain integrity and ensure the framework remains functional and responsive.

6. Communicate and Train

A corporate governance framework is only effective if it’s understood and embraced across the organization. This means that proper training and clear documentation would be provided to ensure all stakeholders are informed. This makes governance a visible and integral part of the organizational culture.

7. Review and Refine

Coporate Governance should be dynamic. This means it should evolve with the organization and its external environment. Nothing should be set in stone because there will always be a need to re-evaluate the current framework’s effectiveness. There must be regular updates in policies and roles to ensure the governance model remains relevant and resilient over time.

Types of Corporate Governance Frameworks

While most organizations adopt a unified corporate governance framework to guide their overall operations, they often customize this framework to address specific functional areas and as a startup, it’s important that your governance framework is customized and tailored to your business needs and organizational goals.

1. AI Governance

AI governance establishes ethical and operational standards for the development and deployment of artificial intelligence systems. It ensures that AI technologies are transparent, and aligned with legal and organizational values. This includes guidelines for bias mitigation, explainability, data privacy, and accountability in automated decision-making.

2. Data Governance

Data governance defines the policies and procedures for managing data assets across the organization. It ensures data integrity, consistency, security, and accessibility. A strong data governance framework supports compliance with regulations like GDPR or NDPR, enhances decision-making, and protects sensitive information from misuse or breaches.

3. Technology Governance

Technology governance focuses on aligning IT strategies with business objectives. It involves evaluating IT investments, managing digital risks, and optimizing resources. This framework helps organizations ensure that technology initiatives support innovation, scalability, and resilience while maintaining compliance and cost-effectiveness.

4. Knowledge Governance

Knowledge governance outlines how an organization creates, shares, stores, and applies knowledge. It promotes learning, collaboration, and innovation by ensuring that intellectual assets are properly managed and leveraged. This framework is especially vital in knowledge-driven industries like consulting, education, and research.

5. Risk Governance

Risk governance provides a structured approach to identifying, assessing, managing, and communicating risks across departments. It supports informed decision-making and operational resilience by integrating risk awareness into strategic planning, internal controls, and performance monitoring.

 

Corporate Governance for Small and Mid-Sized Businesses (SMBs)

Even without formal boards or complex committees, SMBs benefit greatly from structured governance. It enhances decision-making, reduces risk, builds trust with investors, and supports sustainable growth.

Typical SMB Corporate Governance Features

These include:

1. Founders or owners oversee key decisions.
2. Advisory boards offer strategic guidance without legal obligations.
3. Simple internal controls like approval workflows and ethics policies.
4. Consistent governance routines such as quarterly leadership meetings, annual reviews, and documented hiring practices.
5. Benefits of a Strong Corporate Governance Framework

1. Improved Risk Management

A well-established corporate governance system helps organizations proactively identify, risks. With clear compliance protocols and ethical standards in place, companies can avoid legal pitfalls and maintain operational integrity.

2. Greater Transparency and Accountability

Corporate Governance frameworks ensure that stakeholders have visibility into how the organization operates and makes decisions. This openness fosters trust and strengthens stakeholder relationships, both internally and externally.

3. Smarter Decision-Making

By clearly defining roles, responsibilities, and decision-making processes, governance frameworks enable more informed and timely decisions. This leads to better resource allocation and supports long-term strategic goals.

4. Protection of Stakeholder Interests

Effective corporate governance places stakeholder needs at the center. It promotes ethical treatment, ensures fair representation, and builds lasting trust with investors, employees, customers, and partners.

5. Enhanced Financial Performance

Strong corporate governance signals stability and ethical leadership, making organizations more attractive to investors and customers. This credibility can lead to increased funding, customer loyalty, and sustained growth.

In conclusion, the Nigerian Startup Act, 2022 represents a pivotal step toward institutionalizing good governance within Nigeria’s vibrant startup ecosystem. By mandating annual reporting and emphasizing transparency, accountability, and compliance particularly in areas like financial performance, incentive usage, and data protection, the Act lays the groundwork for more resilient and trustworthy startups. Although its full implementation is still in progress, the framework it introduces encourages founders to adopt responsible practices early, fostering investor confidence and positioning Nigerian startups for sustainable growth in an increasingly competitive global market.