The author critically examined why corporate governance (CG)practices in Nigeria banks failed to solve agency problem despite additional guideline issued by the apex bank (Central bank of Nigeria). Two of the banks affected by recent banking reform in the country were used as the case study. The study answered the following questions; What is corporate governance and its functions in Nigerian banking industry? • What are the common agency problems that manifest themselves in the principal agent relationship in the Nigeria banking industry? • What is the role of Central bank regulation in ensuring sound corporate governance practices in Nigerian banks and why did it fail to unearth the agency problems? Holistic approach was used through diverse approaches in identifying and analyzing previous work on agency theory as it affects corporate governance. Some of Corporate governance dimensions examined in relation to principal-agents relationships are board of director, ownership, integrity of financial reporting, transparency. Inconclusive examination determining CG effect on principal-agent relationship necessitated the study.