Does the Mechanism of Corporate Governance mater? Evidence from Nigerian Listed Firms

Ologunwa, Oluyemi. Philip (Ph.D) and Ayilara Mobolaji Akeem
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Ologunwa, Oluyemi. Philip (Ph.D): Department of Economics, School of Management Technology, Federal University of Technology, Akure, Nigeria
Ayilara Mobolaji Akeem: Department of Management and Accounting, Lead City University Ibadan, Nigeria

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 3, 677-683

Abstract: The mechanism of corporate governance and the type of information about corporate decisions are on one side and on the other side, the performances of the firm and the information that the corporation should make public, constitute major issues of discussion in the corporate governance debate. Specifically, this paper examined the importance of corporate governance mechanisms in the issue of making corporate financial report more transparent to stakeholders, and the extent to which the oversight bodies set to oversee the firms. This paper employed quantitative research method using multiple regression tests with panel data analysis spanning 2008 to 2019. Despite that the role of a firm chairman & CEO in one person is discouraged by the SEC and CBN codes, this finding differs, especially in the short run as the combining role of leadership structure (LDS) has a significant relationship with firm performance. Using ROA as a measure of performance, the effect of board size is significant at the short run. This is an indication that initial increase in the number of persons on the board of Nigerian firms raises returns on asset (ROA), however, beyond a certain point; increases in board size will adversely affect ROA. This paper concludes that, the performance of listed firms in Nigeria between 2008 and 2019 was determined by the mechanisms of corporate governance. The paper recommends that separating the roles of CEO and the Chairman of the board is value enhancing, that firm interest should be above self-interest as board responsibilities increases.

Date: 2022
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