This study investigated the relationship between corporate governance and the performance of some selected commercial banks in Nigeria. The purpose of the study is to ascertain the causal relationship between these two variables – corporate governance and financial performance. The study employed cross sectional survey research design, capturing 12 commercial banks studied over the period of 5 years (2015-2020). The matrixes of corporate governance that was used are size of the board, accountability of the board, diversity of the Board. Financial performance indicator is return on investment. Data was collected for the both independent and dependent variables. The independent variables which are board accountability, board size and board diversity were investigated against the financial performance of the selected banks. This is to underscore the causal relationship between these variables and Return on Investment (ROI). Return on Investment (ROI) is our indicator of financial performance. The sample size of the study is 15 financial institutions (commercial banks) using purposive sampling techniques. The study utilized secondary source of data, which include the financial reports of these banks and the corporate governance internal documents of these banks. The data collected was analyzed using multi linear regression data analysis techniques. The population for the study was derived from the Nigerian stock exchange which are 22 in number. The study therefore used census sampling to select all the 22 banks. However, data was only collected for 12 due to incomplete data for the remaining 10. The finding revealed that there is no significant relationship between board size and ROI, there is no significant relationship between board diversity and ROI, and finally, there is also no significant relationship between board accountability and ROI. The study provides an in-depth relationship between the board size, board diversity, board accountability and ROI of commercial banks.
| Published in | Science Journal of Business and Management (Volume 9, Issue 2) |
| DOI | 10.11648/j.sjbm.20210902.18 |
| Page(s) | 119-125 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Corporate Governance, Board Size, Board Diversity, Board Accountability, Return on Investment, Financial Performance
| [1] | Baghat, S. and Bolton, B. (2019). Corporate Governance and Firm Performance: The sequel. Journal of corporate finance, 58, 142-168. |
| [2] | Famogbiele, A. (2012). Failure of the universal banking system in Nigeria: The role of corporate governance. A Paper Presented at the 1st Annual International Conference on Accounting, Finance and Management, Obafemi Awolowo University, Ile Ife. |
| [3] | Mohamad, S., & Sori, Z. M. (2018). An Overview of Corporate Governance: Some Essential. 1-9. Retrieved from http://ssrn.com/abstract=1817091. |
| [4] | Mohammed, F. (2012) Impact of Corporate Governance on banks performance in Nigeria. Journal of Emerging Trends in Economics and Management, 3 (3) 257-260. |
| [5] | Naciti, V. (2019). Corporate Governance and Board of Directors: The effect of a board composition on firm sustainability Performance. Journal of Cleaner Production, 237, 1-7. |
| [6] | Nguyen, T. (2015). Corporate Governance structures and financial performance: A comparative study of publicly listed companies in Singapore and Vietnam. University of Waikato, Hamilton, New Zealand. |
| [7] | Ogunmakin, A., Fajuyagbe, S., & Alayo, R. (2020). Corporate Governance and Financial performance of Deposit Money Banks in Nigeria. Euro Economica, 1 (39), 180-197. Retrieved from https://dj.univ-danubius.ro/index.php/EE/article/view/744. |
| [8] | Onakoya, Adegbemi Babatunde O; Fasanya, Ismail O; Ofoegbu, Donald Ikenna (2014). Corporate Governance as Correlate for Firm Performance. A pooled OLS Investigation of Selected Nigerian Banks. IUP Journal of Corporate Governance, 13 (1) 7-18. |
| [9] | Panda, B., & Leepsa, N. M. (2017). Agency theory: Review of theory and evidence on problems and perspectives. Indian Journal of Corporate Governance, 10 (1), 74-95. |
| [10] | Paniagua, J., Rivelles, R., Sapena, J. (2018). Corporate governance and Financial Performance: The role of ownership and board structure. Journal of Business Research, 89, 229-234. |
| [11] | Parker, D. W., Dressel, U., Chevers, D., & Zeppetella, L. (2018). Agency theory perspective on public-private-partnerships: International development project. International Journal of Productivity and Performance Management. |
| [12] | Pooja, G., & Aarti, M. S. (2014). A study of the impact of Corporate Governance practices on firm performance in Indian and South Korean Companies. Journal of Procedia- Social and Behavioural Sciences, 133, 4-11. |
| [13] | Richard, D., Lee, K., & Nick, D. (2017). Global Health Governance, A conceptual Review. Taylor & Francis Group. |
| [14] | Umar, A. and Danjuma, S. (2020) Effect of Corporate Governance on the Performance of Listed Deposit Money Banks in Nigeria. Science Journal of Business and Management, 8 (1) 35-40. |
| [15] | Zabri, S., Ahmad, K., Wah, K. (2016). Corporate governance practices and Firm Performance: Evidence from top 100 public listed companies in Malaysia. Procedia Economics and Finance, 35, 287-296. |
APA Style
Gbadebo Adeloye. (2021). Effect of Corporate Governance on the Performance of Financial Institutions in Nigeria. Science Journal of Business and Management, 9(2), 119-125. https://doi.org/10.11648/j.sjbm.20210902.18
ACS Style
Gbadebo Adeloye. Effect of Corporate Governance on the Performance of Financial Institutions in Nigeria. Sci. J. Bus. Manag. 2021, 9(2), 119-125. doi: 10.11648/j.sjbm.20210902.18
AMA Style
Gbadebo Adeloye. Effect of Corporate Governance on the Performance of Financial Institutions in Nigeria. Sci J Bus Manag. 2021;9(2):119-125. doi: 10.11648/j.sjbm.20210902.18
Share This Article
Twitter
Linked In
Facebook
Copy
Download@article{10.11648/j.sjbm.20210902.18,
author = {Gbadebo Adeloye},
title = {Effect of Corporate Governance on the Performance of Financial Institutions in Nigeria},
journal = {Science Journal of Business and Management},
volume = {9},
number = {2},
pages = {119-125},
doi = {10.11648/j.sjbm.20210902.18},
url = {https://doi.org/10.11648/j.sjbm.20210902.18},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20210902.18},
abstract = {This study investigated the relationship between corporate governance and the performance of some selected commercial banks in Nigeria. The purpose of the study is to ascertain the causal relationship between these two variables – corporate governance and financial performance. The study employed cross sectional survey research design, capturing 12 commercial banks studied over the period of 5 years (2015-2020). The matrixes of corporate governance that was used are size of the board, accountability of the board, diversity of the Board. Financial performance indicator is return on investment. Data was collected for the both independent and dependent variables. The independent variables which are board accountability, board size and board diversity were investigated against the financial performance of the selected banks. This is to underscore the causal relationship between these variables and Return on Investment (ROI). Return on Investment (ROI) is our indicator of financial performance. The sample size of the study is 15 financial institutions (commercial banks) using purposive sampling techniques. The study utilized secondary source of data, which include the financial reports of these banks and the corporate governance internal documents of these banks. The data collected was analyzed using multi linear regression data analysis techniques. The population for the study was derived from the Nigerian stock exchange which are 22 in number. The study therefore used census sampling to select all the 22 banks. However, data was only collected for 12 due to incomplete data for the remaining 10. The finding revealed that there is no significant relationship between board size and ROI, there is no significant relationship between board diversity and ROI, and finally, there is also no significant relationship between board accountability and ROI. The study provides an in-depth relationship between the board size, board diversity, board accountability and ROI of commercial banks.},
year = {2021}
}
TY - JOUR T1 - Effect of Corporate Governance on the Performance of Financial Institutions in Nigeria AU - Gbadebo Adeloye Y1 - 2021/06/29 PY - 2021 N1 - https://doi.org/10.11648/j.sjbm.20210902.18 DO - 10.11648/j.sjbm.20210902.18 T2 - Science Journal of Business and Management JF - Science Journal of Business and Management JO - Science Journal of Business and Management SP - 119 EP - 125 PB - Science Publishing Group SN - 2331-0634 UR - https://doi.org/10.11648/j.sjbm.20210902.18 AB - This study investigated the relationship between corporate governance and the performance of some selected commercial banks in Nigeria. The purpose of the study is to ascertain the causal relationship between these two variables – corporate governance and financial performance. The study employed cross sectional survey research design, capturing 12 commercial banks studied over the period of 5 years (2015-2020). The matrixes of corporate governance that was used are size of the board, accountability of the board, diversity of the Board. Financial performance indicator is return on investment. Data was collected for the both independent and dependent variables. The independent variables which are board accountability, board size and board diversity were investigated against the financial performance of the selected banks. This is to underscore the causal relationship between these variables and Return on Investment (ROI). Return on Investment (ROI) is our indicator of financial performance. The sample size of the study is 15 financial institutions (commercial banks) using purposive sampling techniques. The study utilized secondary source of data, which include the financial reports of these banks and the corporate governance internal documents of these banks. The data collected was analyzed using multi linear regression data analysis techniques. The population for the study was derived from the Nigerian stock exchange which are 22 in number. The study therefore used census sampling to select all the 22 banks. However, data was only collected for 12 due to incomplete data for the remaining 10. The finding revealed that there is no significant relationship between board size and ROI, there is no significant relationship between board diversity and ROI, and finally, there is also no significant relationship between board accountability and ROI. The study provides an in-depth relationship between the board size, board diversity, board accountability and ROI of commercial banks. VL - 9 IS - 2 ER -
Email: