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The effect of corporate governance on a companys' financial performance (the Nigerian banking sector)

Okpeku, Oyaimame Maureen (2020) The effect of corporate governance on a companys' financial performance (the Nigerian banking sector). Masters thesis, Dublin, National College of Ireland.

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Abstract

The concept of corporate governance that is adequately complied with is acknowledged as an important principle in any corporate organization. This is derived from the fact that good corporate governance practices enhance firms’ value and shareholder's confidence. As a component of corporate governance, the board of directors plays a crucial role in the actualization of organizational goals and objectives. Over the years, corporate governance practices, especially in the Nigerian banking sector, have come under a sharp focus as candidate for investigation, both by regulators and researchers. This is because, despite the Central Bank of Nigeria (CBN) control measures in the Nigerian banking sector, the industry still shows symptoms of financial instability. This was evidenced by the recent acquisition of Diamond bank by Access bank in 2019, which brings the activities of the board of directors into question. In view of the aforementioned challenge, the study was motivated to examine the effect of corporate governance on corporate financial performance using the stakeholder’s theory in the context of selected commercial banks in Nigeria. The study's objectives were to examine the influence of board size, board gender diversity, board independence, and board effectiveness on financial performance measures, like Return on Assets (ROA) and Return on Equity (ROE). The study utilized the quantitative research approach. Data were also collected from annual reports of the selected banks from 2015 to 2019. Multiple regression model was employed to analyze data obtained from the field. The findings of the study reveal that corporate governance measures, like board size, board independence, board gender diversity, have an insignificant relationship with corporate financial performance (ROA and ROE), while board effectiveness has a significant relationship with corporate financial performance (ROA and ROE). Based on the study findings, the study recommends, that corporate governance should be examined from a broader perspective, in all facets, in other to realize the main essence of corporate governance vis-à-vis day to day performance, in order to lend credence to matters that boost maximum corporate performance, without necessarily focusing on how the board is composed - its size, its independence, and its gender diversity.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HD Industries. Land use. Labor > Large Industry. Corporations. > Corporate Governance
Divisions: School of Business > Master of Science in Management
Depositing User: Dan English
Date Deposited: 06 Feb 2021 12:19
Last Modified: 06 Feb 2021 12:19
URI: http://norma.ncirl.ie/id/eprint/4679

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