Every Nigerian boardroom knows the usual suspects: naira volatility, diesel prices, electricity costs, interest rates, and the regulator’s latest circular. Each comes with a real cost, and together, they can push even a well-run business to the brink.
But when poor results are explained by these familiar challenges, there is another question worth asking: what happened inside the business?
Too often, the explanation comes before anyone examines the decisions that led to the problem.
Nigeria’s business environment can be challenging. Even a company that manages its cash carefully, treats its employees fairly, and makes sensible decisions can find itself running out of options. A business that fails is not necessarily badly managed, just as one that survives is not automatically well run. Companies face crises with different levels of financial reserves, obligations, market positions, and access to influence.
Any honest conversation about accountability must begin with this understanding. Otherwise, it becomes another comfortable lecture delivered to people already carrying uncomfortable burdens.
But fairness works both ways. It also applies to employees whose salaries go unpaid, suppliers who keep waiting for their money, and investors who watch their savings disappear. These people deserve more than a list of everything wrong with the Nigerian economy. They deserve an honest explanation of the decisions that contributed to the failure.
The truth is that businesses rarely fail for just one reason. A falling naira may expose the dangers of excessive borrowing. Declining sales may reveal that management has spent years ignoring its customers. Rising energy costs may worsen losses that poor accounting had kept hidden. External pressures and internal weaknesses often feed into one another.
Good leadership means recognising how these forces interact before the damage becomes irreversible.
This is where we need to draw what might be called an accountability threshold: the point at which the business environment can no longer fully explain or excuse management’s decisions.
Three simple questions can help us identify that point.
Was the risk reasonably foreseeable? Was there anything practical the company’s management could have done to reduce its exposure? And can those responsible explain what they did, why they did it, and how they responded when things did not go as planned?
These questions do not demand that business leaders predict the future or guarantee perfect results. They simply demand evidence of sound judgement.
Consider a company that earns most of its revenue in naira but takes on substantial dollar-denominated debt. Management cannot control the exchange rate. But it can explain why it accepted that risk, what alternatives it considered, and how much depreciation the business could reasonably withstand.
The exchange rate shock belongs to the economy. The decision to take on the debt belongs to management and should be open to scrutiny in the boardroom.
The distinction becomes even clearer when we look at corporate governance.
Inflation does not force directors to approve dividends that the company has not earned. Expensive diesel does not compel executives to conceal conflicts of interest. Regulatory uncertainty does not justify hiding an audit report.
Economic hardship creates pressure, sometimes enormous pressure. But it cannot excuse every decision made under that pressure.
Consider the experiences of Arik Air, North-South Bank, ENASCO, and ReelFruit. Although these organisations operate in different circumstances, their stories offer useful lessons about the relationship between business conditions, leadership, and accountability.
Arik Air illustrates how difficult operating conditions can intersect with questions of corporate governance. Alongside foreign exchange pressures, court testimony has included allegations of asset stripping and conflicts of interest. These allegations should, of course, not be treated as established findings.
North-South Bank’s collapse exposed serious governance concerns, including board interference, dividends unsupported by profits, and weak internal inspection.
ENASCO, a public footwear enterprise, reportedly operated far below its intended capacity before eventually closing. Its experience highlights the importance of sound planning, transparency, and a business model capable of sustaining operations over time.
ReelFruit, by contrast, offers an example of how a business can adapt through product diversification and market segmentation.
These organisations faced different challenges, and their experiences should not be treated as identical. But they point to a common lesson: the more difficult the business environment becomes, the more important leadership judgement and effective oversight become.
External pressures deserve to be acknowledged. At the same time, we must examine the decisions that make a business more vulnerable or help it withstand a crisis.
Accountability, therefore, is not simply about finding someone to blame after a business fails. It is about ensuring that leaders can explain what happened, what choices were available, and what they did with those choices.
The real challenge is to make this kind of scrutiny a normal part of running a business, rather than something that happens only when the business is already in trouble.
Whenever management points to an external shock, the board should ask a simple follow-up question: what did we do in response?
If energy costs went up, did the company review its production schedules, maintenance plans, or pricing assumptions? If foreign exchange became difficult to obtain, which commitments did management reconsider? Who was responsible for the response, and what were the results?
These questions help move the conversation beyond explaining the problem to understanding how it was managed.
Boards also need to look at risks together, not just one at a time. A business might survive a sharp fall in the naira, delays in customer payments, or a major power disruption individually. But what happens when all three occur at once?
That is when good planning matters most.
Useful risk planning does not stop at identifying what could go wrong. It considers how different problems might combine, what that would mean for the business, and what decisions need to be made before cash runs short.
But there is an even bigger issue: accountability must reach the people powerful enough to resist it.
An internal audit department cannot protect a company if an influential executive can silence its findings. Politically connected shareholders should face the same scrutiny as everyone else. And a board’s independence means very little if its members cannot ask difficult questions, formally record their objections, or refuse to approve a questionable transaction.
Ultimately, all these safeguards depend on the culture leaders create.
Employees quickly learn what happens when they tell the truth. If those who raise early warnings are punished while those who offer polished explanations are rewarded, problems will remain hidden until they become too serious to ignore.
A board that genuinely wants honesty must make it safer to admit a weakness than to cover it up. People should be encouraged to raise concerns early, when there is still time to do something about them.
None of this absolves government of its responsibilities. Businesses need reliable infrastructure, consistent and coherent regulation, and institutions they can trust. Executives should continue to demand these conditions because they are essential to a healthy business environment.
But they must also take responsibility for what happens within their own organisations.
The business environment matters. It can make success harder, narrow available choices, and sometimes overwhelm even the best-prepared enterprise. We should never underestimate its impact or casually blame business leaders for every failure.
Yet we must also resist the temptation to use the environment as a convenient explanation for every disappointing result.
Before accepting another account of what the economy did to a business, boards should ask what its leadership did with the choices it still had.
That question should be asked before a crisis, guide decisions while the crisis unfolds, and remain relevant long after the explanations have been given.
Because when a business fails, the consequences rarely stop with its owners. Employees lose their livelihoods. Suppliers lose income. Investors lose money. Families and communities feel the impact.
All these people deserve more than excuses. They deserve answers.
Peterside is a leadership and turnaround management expert