Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria

UDEH, FRANCIS NNOLI and ABIAHU, MARY-FIDELIS CHIDOZIEM and TAMBOU, LIBERTY EJOMAFUVWE (2017): Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria. Published in: The Nigerian Accountant , Vol. 2, No. 50 (30 April 2017): pp. 54-62.

Abstract

This study evaluated the Impact of Corporate Governance on Firms Financial Performance in Nigeria Quoted Banks in order to determine the Banks Financial Performance before and after the introduction of Code of Corporate Governance in Nigeria. The main objective of this study is to evaluate Board Composition with a view to determining its impact on Firms Financial Performance. Board Composition was used as measure of Corporate Governance while Return on Capital Employed (ROCE), was used to operationalise Financial Performance. The study is anchored on Shareholders theory. The Population of this study comprised fifteen (15) banks whose shares are quoted on Nigeria Stock Exchange. Judgmental sampling technique was used to select seven (7) banks from the entire Population of the study (which makes up the sample size). Data were obtained from secondary source (published financial statements of the selected quoted banks) covering the periods of 2003 – 2014. The method of data analysis utilised was Ordinary Least Squares Regression Analysis. A model was formulated. The findings from this study showed that Board composition has a negative, though insignificant impacts on ROCE during the 2003 – 2008 period (p1) and during the 2009 – 2014 period (p2). In conclusion, the way in which corporate governance is organised differs among countries, depending on the economic, political and social contexts. We therefore recommend that the directors of board should adhere to CBN regulations and guidelines in bank management, with this, they can achieve their aim and shareholders confidence will be restored, on the board.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate Governance, Bank Performance, Quoted Firms
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M41 - Accounting

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