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

Francis Nnoli Udeh, Mary-Fidelis Abiahu () and Liberty Ejomafuvwe Tambou

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Corporate Governance; Bank Performance; Quoted Firms (search for similar items in EconPapers)
JEL-codes: G21 G34 L25 M41 (search for similar items in EconPapers)
Date: 2017-04-30, Revised 2019-07-07
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Published in The Nigerian Accountant 50.2(2017): pp. 54-62

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