Corporate governance is the set of rules and procedures by which a company is governed, and it is laid down and enforced by the board of directors. Corporate governance helps balance the interests of all the major stakeholders in the business, such as investors, staff, vendors, and customers. Many investors are usually skeptical about investing in tech startup businesses due to lack of good corporate governance.
Corporate corruption and scandals are not new. The fall of the Medici in the fifteenth century, Volkswagen’s false emissions claims in the 2010s are good examples of early corporate corruption and scandals. Rogue directors, lopsided controls and corporate implosion are prevalent in the business world.
Africa’s fintech ecosystem is not left out in this. The tech industry as a whole is immersed in this. In recent times, several allegations of miscount have been levelled against some Africmn fintech founders bothering on sexxual and non-sexxual misconduct. Risevest CEO was asked to resign on grounds of both sexual and non-sexual allegations. Other Africa’s startups that have been enmeshed in corporate corruption and scandals are Healthlane and Kloud Commerce.
Healthlane was run solely by its founders. When a company has no board of directors to oversee its affairs, the founders could spend company funds as they wished.
The alleged scandals in Flutterwave, Nigeria's top fintech startup, is another case in mind. The Founder and CEO, Olugbenga Agboola was accused of mismanagement, conducting shady businesses , tax evasion and more in 2022. This led to the Kenyan authorities sanctioning the company. Agboola's brother-in-law, Ifeoluwa Orioke was also accused of making sexual advances on female staff of the company These few cases give credence to the importance of good corporate governance in technology industry especially the emerging technologies
In November 2025, Paystack, suspended its Co-founder and Chief Technology Officer, Ezra Olubi over alleged immoralities. The suspension was prompted by inappropriate and disturbing tweets Olubi made in 2009 and 2011 about women and animals. The company in a statement said:
"Paystack is aware of the allegations involving our Co-founder, Ezra Olubi. We take matters of this nature extremely seriously. Effective immediately, Ezra has been suspended from all duties and responsibilities pending the outcome of a formal investigation.” Paystack was able to do this due to its corporate governance in place. "In accordance with our internal policies we have initiated review process led by Paystack Board," the company said.
But the rise of ESG, the expectations and responsibilities placed on directors, and the ease with which corporate shortcomings can be exposed by company insiders and others on digital media are — or should be — focusing the minds of corporate decision-makers like never before.
Given these pressures and the competition in tech industry, corporate governance is increasingly becoming important part of corporate strategies. Employing good corporate governance helps in reduction of the risk of non-compliance with statutory and regulatory obligations as well as helps a company discourage or counter charges or assumptions that it’s not progressive or open-minded. Sound corporate governance policies and practices can lead to corporate diversity, green credentials, fair supply chains and other outcomes which investors look out for.
Below are some the importance of good corporate governance in tech industry:
Trust and Transparency
The fintech industry often deals with sensitive user data and critical infrastructure. Good corporate governance ensures transparency in how companies handle data, which helps build and maintain trust with customers, investors, and regulators.
Regulatory Compliance
With evolving regulations in data protection (like GDPR) and cybersecurity, strong governance helps tech companies stay compliant, reducing the risk of legal penalties and reputational damage.
Ethical Decision-Making
The fintech industry frequently faces ethical dilemmas, such as issues related to AI, privacy, and social impact. Good governance frameworks help ensure that companies make decisions that are not only profitable but also ethically sound.
Risk Management
The rapid pace of innovation in tech comes with significant risks, including cybersecurity threats, market volatility, and technological obsolescence. Effective governance helps companies identify, manage, and mitigate these risks proactively.
Sustainable Growth
Good corporate governance fosters a culture of accountability and long-term strategic thinking, which is essential for sustainable growth in the highly competitive and fast-evolving tech industry.
Investor Confidence
Investors are more likely to support companies with robust governance structures because they provide assurance of sound management practices, risk mitigation, and responsible use of capital. We have heard stories about fintech startups winding up after raising capital due to misappropriations by the founders enabled by lack of governance structures.
Innovation and Compliance Balance
Strong governance helps fintech companies strike a balance between pursuing innovative projects and ensuring these innovations comply with legal, ethical, and social standards.
In summary, good corporate governance in the fintech industry is very necessary in maintaining transparency, accountability, and ethical behavior. It fosters fair treatment of all stakeholders, protects investors' interests, enables innovation, and builds consumers goodwill and public trust. In any industry experiencing rapid evolution and disruptive potential such as tech, strong governance frameworks can also mitigate risks associated with issues like data privacy, cybersecurity, and regulatory compliance. Ultimately, it contributes to the long-term sustainability and success of tech companies
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