Effects of Corporate Governance on Corporate Performance of Deposit Money Banks in Nigeria

Abstract

This study examines the gaps between principle based and rule based of corporate governance and its effects on the corporate performance of Deposit Money Banks in Nigeria (NDMBs).  The population for this study consisted of all the listed sixteen NDMBs. Secondary data used for this study were derived from the annual financial statements of NDMBs listed in Nigerian Stock Exchange (NSE) covering a period of ten (10) years (2006-2017). Panel analysis (pool regression, fixed and random effect) were used in interpreting the variables; Board Structure (BOS), Audit Committee Independence (ACI) and Durability of Chairman and Executive Director (CEOD).  The coefficient estimated at .0647115, -.2464618, -.0299811 for BOS, ACI, CEOD) with R² = 0.7272, connotes that BOS has a positive relationship on corporate performance (CP) of NDMBs, ACI and CEOD had negative relationship on the CP of NDMBs, CG has 72% positive effect on CP of NDMBs. The study recommended that NDMBs should change from principle based to rule based due to low level of corporate governance compliance in Nigeria. Government should discredit the activities of durability of executive directors of a company.

Keywords: Corporate governance, Corporate performance, Deposit money banks, Board structure

DOI: 10.7176/RJFA/13-14-02

Publication date:August 31^st 2022