Effect of Corporate Governance on the Performance of Listed Deposit Money Banks in Nigeria
The study considered the implication of corporate governance on the performance of quoted deposit money banks in Nigeria. The deterioration of banks asset portfolios, largely due to distorted credit management, was one of the main structural sources of corporate governance problem. To a large extent, this problem was the result of poor corporate governance in countries’ banking institutions and industrial groups. Poor corporate governance, in turn, was very much attributable to the relationships among the government, banks and big businesses as well as the organizational structure of businesses. The objective of the study is to investigate the connection between corporate governance proxy (Board size, Board composition and Firm size) and Return on Asset (ROA) of quoted deposit money banks in Nigeria for a period of 5 years (2015-2019). Data for the study was obtained from secondary sources i.e. audited annual reports of fifteen (15) listed banks on floor of the Nigeria Stock Exchange (NSE, 2017). The study employed panel data analysis using regression model. The Statistical Package used was Stata 11 version. Findings showed that there is significant relationship between board composition, board size and firm size and the ROA of deposit money banks in Nigeria. Following from the above conclusion of the study, it was recommended that to improve corporate governance issues in deposit money banks in Nigeria, focus on board composition, board and firm sizes has to be intensified as it was positively related to return on asset of Deposit Money Banks.
Umar Abbas Ibrahim,
Effect of Corporate Governance on the Performance of Listed Deposit Money Banks in Nigeria, Science Journal of Business and Management.
Vol. 8, No. 1,
2020, pp. 35-40.
Liu, Y., Miletkov, Mihail, K., Wei, Z. & Yang, T. (2015) Board independence and firm performance in China, Journal of Corporate Finance, Elsevier. 30. 223-244.
Chong, W. L., Ting, K. H. & Cheng, F. F. (2017) Impacts of corporate governance on Asian REITs performance. Pacific Rim Property Research Journal, 23: 1, 75-99,
Abdallah, A. A., & Ismail, A. K. (2017). Corporate governance practices, ownership structure, and corporate performance in the GCC countries. Journal of International Financial Markets, Institutions & Money, 46, 98–115.
Deng, C., Xiao, Z., & Zhou, L. (2017). Information systems and internal control: Evidence from China. Electronic Commerce Research, 17 (3), 361–377.
Azevedoa, A., Guney, Y., & Len, J. (2018). Initial public offerings in China: Underpricing, statistics and developing literature. Research in International Business and Finance, 46, 387–398.
Luan, C., Ying, Y., Huang, H., & Wang, K. (2018). CEO succession decision in family businesses – A corporate governance perspective. Asia Pacific Management Review, 23 (2), 130 – 136.
Strike, V. M. (2013). The most trusted advisors and the subtle advice process in family firms. Family Business Review, 26, 293-313. https://doi.org/10.1177/ 0894486513492547
Garba, T., Sanda, A. U., and Mikailu, A. S, (2004), “Director Shareholding, Board Size and Financial Performance of Firms in the Nigerian Stock Exchange”. Nigerian Journal of Accounting Research. Vol. 1, No. 1, June, pp 22-34.
Ting, I. W., Kweh, Q. L., Lean, H. H., & Ng, J. H. (2016). Ownership structure and firm performance: The role of R&D. Institutions and Economies, 8 (4), 1–21.
Marinc, M. (2013). Banks and information technology: Marketability vs. relationships. Electronic Commerce Research, 13, 71–101.
Saif, S. A., Al-Matari, E. M. &, Al-Matari, Y. A., (2017). Ownership structure, audit quality and firm performance moderating and direct-effect models: An empirical study. Corporate Board: Role, Duties & Composition, 13 (1), 28–35.
Merli, R., Preziosi, M., & Acampora, A. (2018). Sustainability experiences in the wine sector: Toward the development of an international indicators system. Journal of Cleaner Production, 172, 3791-3805.
Kisaka, S. E., Gitundu, E. W., Kiprop, S. K., & Kibet, L. K. (2016). The influence of ownership structure on financial performance of privatized companies in Kenya. African Journal of Business Management, 10 (4), 75–88.
Astrachan, C. B., Botero, I., Astrachan, J., &Prugl, R. (2018). Branding the family firm: A review, integrative framework proposal, and research agenda. Journal of Family Business Strategy, 9 (1), 3-15.
Corbetta, G., Miller, D., Minichilli, A. (2013). Is family leadership always beneficial? Strategic Management Journal, 34 (5), 553-571.
Aktas, N., Andries, K., Croci, E., et al. (2018). Stock market development and the financing role of IPOs in acquisitions. Journal of Banking and Finance, 98, 25–38.
Musallam, S. R. (2015). Relationships between ownership structures and corporate performance: Evidence from Malaysia. Mediterranean Journal of Social Sciences, 6 (3), 70–76.
Chan, K., Pan, Y., Weng, R., & Nianhang, X., (2018). The role of corporate philanthropy in family firm succession: A social outreach perspective. Journal of Banking and Finance, 88, 423-441.
Powell, G. N., & Eddleston, K. A. (2017). Family involvement in the firm, family to business support, and entrepreneurial outcomes and exploration. Journal of Small Business Management, 55 (4), 614-631. https://doi.org/10.1111/jsbm.12252.
Siddiqui, S. (2015), "The association between corporate governance and firm performance – a meta-analysis", International Journal of Accounting & Information Management, 23 (3), 218-237.
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 Behavioral Sciences, 133, 4-11.
Du, M., Chen, S. and Shao, H. (2014), "Corporate governance: institutional arrangement or market choice? An analytical framework of simultaneous equations based on causal relationship", Journal of Chinese Management Studies, 8 (4) 717-744.
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.
Jackie K., Yiping Q., Francesco Q. & Ravix J.(2014) Corporate governance, value and performance of firms: new empirical results on convergence from a large international database, Journal of Industrial and Corporate Change, 23 (2), 361–397.
Mohammed F. (2012) Impact of corporate governance on banks performance in Nigeria. Journal of Emerging Trends in Economics and Management 3 (3) 257 – 260.
Richard D. Lee K. & Nick D. (2017) Global Health Governance, A Conceptual Review. Taylor & Francis Group
Greg B. R., Filatotchev I. and Aguilera R. V (2013) Corporate Governance and Investors' Perceptions of Foreign IPO Value: An Institutional Perspective. Academy of Management Journal 57 (1).
Nguyen, Tuan (2015) Corporate governance structures and financial performance: A comparative study of publicly listed companies in Singapore and Vietnam. University of Waikato, Hamilton, New Zealand.
Freeman R. E. (1984) Strategic Management: A stakeholder Approach. Boston: Pitman.
Freeman R. E. (1994) The Politics of Stakeholder Theory: Some Future Direction. Business Ethics Quarterly 4. 409-422.
Freeman R. E. (1999) Divergent Stakeholder Theory. Academy of Management Review 24: 233-236.
Kuznetsov P. & Muravyev A. (2001). Ownership Concentration anf Firm Performance in Russia: The Case of Blue Chips of the Stock Market, Journal Storage JSTOR, 51 (4), 469-488.
Baltagi BH. 2005. Econometric Analysis of Panel Data, John Wiley & Sons Ltd, West Sussex.
Sunday K. 2008 ‘Corporate governance and firm performance: The Case of Nigerian Listed firms’ European Journal of Economics, Finance and Administrative Sciences, Issue 14 (2008).
O'Connell, V. and Cramer N. (2010). The relationship between firm performance and board characteristics in Ireland. European Management Journal. 28 (5), 387-399.