Systemic governance failures in Nigerian businesses, characterised by weak oversight and recurrent scandals, present a critical barrier to sustainable economic development. Prevailing diagnostic models often lack actionable frameworks for organisational-level intervention. This study aimed to develop and test a participatory action research (PAR) framework for diagnosing and remediating systemic governance challenges within Nigerian enterprises. The objective was to move beyond identification to facilitate co-created, context-specific solutions. A multi-cycle action research methodology was employed, engaging four Nigerian firms across sectors. Data collection integrated participatory workshops, document analysis, and reflective journals over iterative cycles of diagnosis, planning, intervention, and evaluation. A dominant theme was the critical role of informal relational networks, which frequently subverted formal governance protocols. In three of the four cases, these networks were identified as the primary conduit for conflicts of interest, undermining accountability mechanisms. The action research framework proved effective in surfacing latent, systemic issues often obscured by conventional audits. Sustainable governance improvement requires addressing the interplay between formal structures and entrenched informal practices. Firms should institutionalise periodic participatory governance audits. Regulators are encouraged to incorporate principles of action research into corporate governance codes to promote proactive, internally-driven reform. Action research, corporate governance, Nigeria, behavioural finance, institutional voids, participatory diagnosis This paper provides a novel, practitioner-validated diagnostic and intervention framework that integrates behavioural insights with governance structures, offering a replicable model for addressing systemic challenges in similar institutional contexts.