Aligning Corporate Governance Strategy with Sustainability: Managing Oil-Companies and Resource Host-Communities Relationships in the Petroleum Industry in Nigeria

Abstract

Petroleum discovery has been described as a ‘blessing’ and a ‘curse’ for Nigeria. Whilst oil wealth has been a boon to the economy, oil-companies' unwillingness to be ‘sustainably responsible’ to their resource-host-communities has resulted in multiple problems. This study, focusing on Nigeria's petroleum industry, confirms a framework with genuine potential to favourably impact the industry by validating shared dependency and exploring the relationship between two knowledge areas: corporate governance and sustainability. From the standpoint of resource-host-community ‘risks-and-impacts’, the study's overarching goal is to strengthen the oil-companies'/industry's ability to deliver their businesses on time, within/on budget, and at design capacity. A case study of three oil-companies was used, adopting a qualitative (interpretive) research technique. Study finds that in a turbulent business environment, aligning corporate governance with sustainability and managing oil-companies and their resource-host-community relationships is one attempt to deal with the induced-risks. By analysing the distinction between academic and practitioner research, as well as the tensions from this division, the study shows that a hybrid research merging theoretical and practice-guided study is feasible. The study also contributes to stakeholder theory by offering an empirical description of how resource-host-communities’ impact oil-companies decision-making processes with the potential for collaboration, and to breed and engender trust and unanimity. The findings show that stakeholder theory could be used to solve a variety of organisational problems plaguing the industry. This is the first study in the industry emphasizing the relevance of involving resource-host-communities in Joint-Management-Stakeholder-Committees (JMSCs) concept, demonstrating the influence and practical significance in governance.