Corporate Governance Principles Application and the Financial Performance of Deposit Money Banks in Nigeria: An Impact Assessment

Abstract

Corporate Governance entails designing systems, procedures, structures and taking transparent decisions on ways of improving firms’ value to promote accountability. Poor application of Corporate Governance principles was identified as a major possible factor in firms’ failure globally. Despite the focus on the subject matter, little attention is paid on Corporate Governance application and the financial performance of Deposit Money Banks in Nigeria. This motivated the paper to assess the impact of Corporate Governance application on the financial performance of some Deposit Money Banks in Nigeria. A hypothesis was formulated and tested in line with the main objective of the study. The study used both descriptive and historical research methods, while the sample size was determined using judgmental sampling technique. Method used in data collection was secondary source. The t-test analysis technique was adopted to estimate the relationship between the application of Corporate Governance principles and financial performance. Findings proved that there is no significant relationship between board structure and banks’ financial performance. The paper suggests that other Corporate Governance indices must also be considered in measuring the financial performance of Deposit Money Banks in Nigeria for value improvement and accountability.

Key Words: board structure, corporate governance, deposit money banks, financial performance, principles