ABSTRACT
This chapter analyses the reasons for the lack of enforcement of directors' duties in sub-Saharan Africa. It explores the inherent difficulties with derivative actions as an enforcement mechanism. It argues that derivative actions suffer from certain difficulties, such as the incentive problem, information asymmetry, and cost problem. It argues that these problems are not peculiar to derivative actions in sub-Saharan Africa but are rather inherent in this enforcement mechanism. They are, therefore, unlikely to be resolved by simple statutory reforms. Following this, the chapter critically examines other specific challenges associated with enforcement in sub-Saharan Africa. It argues that, in addition to the general challenges associated with derivative actions, countries in sub-Saharan Africa suffer from unique challenges such as corruption, lack of judicial independence, and infrastructural and institutional difficulties with the judicial system. These challenges impede the effective enforcement of directors' duties through the court system and explain the dismal enforcement results recorded in sub-Saharan Africa.
