Effect of Corporate Governance on Financial Performance of Selected Deposit Money Banks in Nigeria
Author(s)
Adesanya, Adeboye O. , Omosebi, Tolulope R. , Alalade, Yimka S. A. ,
Download Full PDF Pages: 31-43 | Views: 607 | Downloads: 179 | DOI: 10.5281/zenodo.5266511
Abstract
Despite reforms in the financial system ranging from bailouts and other related economic reforms to rejig the system, corporate governance still poses a fundamental concern to financial system regulators and investors alike. Financial system failures and other unfriendly activities have made corporate governance a relevant topical issue in industrialized and emerging nations alike. Hence, this study focused on the effect of corporate governance on the financial performance of selected deposit money banks in Nigeria between 2015-2019. The study made use of ex post-facto research design. The study employed secondary source of data obtained from the audited annual report and financial statement of five (5) Deposit Money Banks listed on the Nigerian Stock Exchange. A purposive sampling method was employed to select six quoted banks in Nigeria. The study used estimated technique of Descriptive statistics, Pearson Product Moment Correlation (PPMC) analysis and Ordinary Least Square- Multiple regression method for analysis. Result of correlation analysis shows that there is no significant relationship (r = -.013, n=30, p (.947)>.05) between board member when tested on financial performance of selected deposit money banks in Nigeria. The association between board independent size and financial performance of Deposit Money Banks in Nigeria was negative (r = -.639, n=30, p(.000)<.05); there is also a negative significant relationship between board composition and financial performance of Deposit Money Banks in Nigeria (r = -.452, n=30, p(.012)<.05) while there is no significant relationship between bank size and financial performance of Deposit Money Banks in Nigeria (r = -.031, n=30, p(.873)>.05). None of the predictor variable in their individual capacity was able to affect significantly, the Return on Assets of the Deposit Money Banks in Nigeria. The study concluded that the role corporate governance plays on the achievement of good performance is imperative and highly significant. The study recommended among others, a review of existing laws on corporate governance for continuous relevance and adequacy, updating the rules with loop holes now exploited to breach the law.
Keywords
Deposit Money Banks, Board member size, Board independent size, Board composition, financial performance and Corporate governance.
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