Redefining Corporate Governance in Response to the Surge of the GiG Economy

The GiG Economy is

characterized by a workforce immersed in transitory, flexible, and autonomous contractor arrangements...

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The pervasive expansion and global impact of the gig economy have propelled conventional employment models and corporate governance protocols into uncharted territory, confronting unparalleled challenges. Within this era marked by a paradigm shift in work dynamics, the imperative arises to dissect the repercussions of the gig economy on corporate governance. The gig economy is characterised by a workforce immersed in transitory, flexible, and autonomous contractor arrangements. The propelling factors behind this shift include flexibility, work-life equilibrium, autonomous entrepreneurship, digitalisation, enhanced job exposure opportunities, alternative revenue streams, and accelerated career progression, attributed to the ascendancy of millennials and Gen-Zs. This transformative phenomenon has rapidly emerged as a formidable force in the contemporary business panorama, projected to surpass a gross volume of $455 billion by year-end.


Expanding Gig Economy Landscape. Image: Mastercard Gig Economy Industry Outlook and Needs Assessment

Numerous individuals in Nigeria, particularly within the tech sector, have adroitly harnessed this opportunity by participating in global endeavours while remaining rooted locally. The shift in employment paradigms poses distinctive challenges to established corporate governance, necessitating a reevaluation of traditional approaches. As the gig economy continues its upward trajectory, a meticulous analysis of its impact on corporate governance becomes indispensable, as does the exploration of requisite adaptations to adeptly navigate this evolving employment terrain.

To unravel the ramifications of the gig economy on corporate governance, a deep comprehension of the defining characteristics of this emergent economic trend is indispensable. The gig economy's ascendancy is fueled by technological advancements, fueling substantial growth in recent years. Fueled by the proliferation of digital platforms, workers are progressively embracing freelance and temporary engagements, diverging from the established realm of enduring employment contracts.

Nigeria, boasting 122.5 million internet users as of January 2023, with a penetration rate of 55.4 percent of the total population, positions itself as a prime contender for a burgeoning gig economy in the years ahead. This transition has resulted in a weakening of the conventional employer-employee relationship, engendering a decentralised workforce that challenges the conventional tenets of corporate governance. This shifting dynamic between employers and workers within the gig economy represents a discernible departure from the established employer-centric model. Pioneering platforms in sectors such as ride-hailing and freelancing have adroitly harnessed the gig economy's potential, embracing platform-based business models. This shift towards a gig-oriented labour force empowers individuals to function as independent contractors, bestowing them with amplified control over their work-life equilibrium and engendering heightened flexibility. However, this newfound elasticity mandates a comprehensive reassessment of established corporate governance practices.

The emergence of the gig economy has ushered in novel quandaries in risk management and accountability. Conventional corporate governance structures have been hinged on the premise of a stable workforce and well-defined roles and obligations. However, the gig economy's lack of steadfast, long-term employment contracts exposes corporations to heightened risks pertaining to workforce administration, compliance, and quality assurance. Ergo, a comprehensive overhaul of corporate governance practices becomes imperative, concomitantly ensuring accountability and ameliorating potential hazards linked to gig-based business models. Noteworthy entities have already acknowledged this imperative and enacted adaptive governance strategies to accommodate the needs of gig workers. Certain companies have adopted agile governance frameworks, facilitating decentralised decision-making and empowering gig workers to assume ownership of their projects. This not only cultivates autonomy and accountability among gig workers but also fortifies the corporation's capacity to efficaciously oversee a dispersed workforce.

Furthermore, the diverse workforce, characterised by its remote and flexible work arrangements, engenders unique coordination and communication quandaries for corporations in their endeavour to adhere to labour laws and regulations. This complexity injects an additional stratum of intricacy into the arena of corporate governance against the backdrop of the gig economy's ascendance. The quandaries precipitated by the gig economy mandate that directors re-envision corporate governance practices to adroitly manage and harness the potential of a gig-based workforce. This imperatively necessitates a foundational shift in mindset and a reevaluation of traditional paradigms of corporate governance. The antiquated model of rigid hierarchies and tenure-based stability must cede ground to a more supple and adaptable framework capable of accommodating the distinctive traits of the gig economy. By imbuing corporate governance with a penchant for flexibility, companies can harness the advantages of the gig economy while concurrently maintaining judicious oversight and mastery over their operations. This metamorphosis instils a milieu fostering innovation, collaboration, and nimbleness, ultimately propelling sustainable growth within the gig economy era. Ergo, reshaping corporate governance to seamlessly integrate the fluid contours of gig work stands as an indispensable requisite for corporations aspiring to flourish within this evolving landscape.

Moreover, the gig economy, intertwined with digital platforms and online marketplaces, augments the urgency for transparency and accountability within these domains. This encompasses the assurance of equitable and ethical practices, embracing equitable remuneration, safeguarding workers' rights, and unwavering adherence to labour regulations. Given the transient nature of gig arrangements, matters of appropriate compensation, health coverage, pension schemes, and other accrued benefits emerge as subjects of intense debate. Contrary viewpoints abound regarding the optimal methodologies to equitably compensate gig workers and fulfil the mandated regulatory obligations concerning employee engagement and remuneration. Directors are compelled to remain well-versed in these facets and strategize meticulously to achieve comprehensive compliance, thus steering their enterprises clear of transgressions and the accompanying wrath of regulatory bodies.

The Gig Economy, Contract Enforcement and Remote Working Economy: Implication for Corporate Governance Practice

The gig economy, epitomised by the preponderance of transient contracts and freelancing, perturbs the conventional employment milieu, concurrently blurring the delineation between employees and autonomous contractors. This not only beckons implications for corporate governance but also ushers in an array of trials that corporations must navigate as they adapt to this new vista. An imperative facet pertains to the requisite redefinition of the roles and responsibilities of the diverse stakeholders entwined within the tapestry of corporate governance. While the board of directors traditionally wields substantial decision-making authority, an imperativeness emerges to inclusively factor in the perspectives and interests of gig workers, who may not inevitably be ensconced within the precincts of the boardroom.

In summation, the exponential surge and distinctive attributes of the gig economy compel a comprehensive reevaluation of corporate governance strategies and protocols. By diligently comprehending the ramifications of the gig economy on crucial dimensions encompassing decision-making, adaptability, risk management, and accountability, corporations can harmonise their governance strategies with the burgeoning employment landscape. As the gig economy incessantly transfigures the traditional employer-employee rapport, it becomes an inescapable directive to pivot and assimilate innovative governance practices that adeptly accommodate the emerging challenges and opportunities wrought by this transformative economic trajectory.

Research and Advocacy Department, IoD Nigeria

28, Cameron Road, Ikoyi, Lagos, Nigeria


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