Effects of Corporate Governance Structure on Financial Performance of Quoted Deposit Money Banks in Nigeria
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Date
2016
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University of Ilorin Library and Publications Committee
Abstract
The Nigerian banking sector has witnessed dramatic growth post-consolidation. Governance weaknesses in these banks have created problems across the sector and the economy as a whole. To a large extent, this problem was the result of poor governance in the country's banking institutions and industrial groups. This study examined the effect of corporate governance on the financial performance of quoted DMBs in Nigeria. The study employed secondary data obtained from NSE fact books (audited reports of selected bariks between 2007 and 2014) and analysed with panel data using both fixed and random effect models. The outcome of the study showed that board size has a negative relationship with performance of DMBs and corporate governance disclosure index has a positive effect on performance of DMBs in Nigeria. The study concludes that board size and corporate governance disclosures exert significant influence on performance of DMBs in Nigeria. The study therefore recommends among others that (i) DMBs and their regulators (CBN and NDIC) must ensure the numbers of people sitting on its board are within the range prescribed to avoid the negative effect of a large board size; (ii) regulators must ensure that operators comply with relevant codes of corporate governance as it relates to disclosures; and (iii) management should organise trainings for directors, managers and other key staff members to equip them with necessary knowledge and skills of corporate governance.
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Keywords
Corporate Governance codes, Performance, Earning per share, Board Members