Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria

Udeh, F.N., Abiahu, M.C., & Tambou, L.E. (2017). Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria. The Nigerian Accountant, (50)2, 54-62

9 Pages Posted: 12 Jun 2017

See all articles by Dr. Francis Udeh

Dr. Francis Udeh

Nnamdi Azikiwe University - Department of Accountancy

Mary-Fidelis Chidoziem Abiahu

Nnamdi Azikiwe University - Department of Accountancy

Liberty Tambou

Nnamdi Azikiwe University Awka, Students

Date Written: April 30, 2017

Abstract

This study evaluated the Impact of Corporate Governance on Firms Financial Performance in Nigeria Quoted Banks in order to determine the Banks Financial Performance before and after the introduction of Code of Corporate Governance in Nigeria. The main objective of this study is to evaluate Board Composition with a view to determining its impact on Firms Financial Performance. Board Composition was used as measure of Corporate Governance while Return on Capital Employed (ROCE), was used to operationalise Financial Performance. The study is anchored on Shareholders theory. The Population of this study comprised fifteen (15) banks whose shares are quoted on Nigeria Stock Exchange. Judgmental sampling technique was used to select seven (7) banks from the entire Population of the study (which makes up the sample size). Data were obtained from secondary source (published financial statements of the selected quoted banks) covering the periods of 2003–2014. The method of data analysis utilised was Ordinary Least Squares Regression Analysis. A model was formulated. The findings from this study showed that Board composition has a negative, though insignificant impacts on ROCE during the 2003–2008 period (p1) and during the 2009–2014 period (p2). In conclusion, the way in which corporate governance is organised differs among countries, depending on the economic, political and social contexts. We therefore recommend that the directors of board should adhere to CBN regulations and guidelines in bank management, with this, they can achieve their aim and shareholders confidence will be restored, on the board.

Keywords: Corporate Governance, Bank Performance, Quoted Firms

JEL Classification: G21, G32, L25, M41, M48

Suggested Citation

Udeh, Francis and Abiahu, Mary-Fidelis Chidoziem and Tambou, Liberty, Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria (April 30, 2017). Udeh, F.N., Abiahu, M.C., & Tambou, L.E. (2017). Impact of Corporate Governance on Firms Financial Performance: A Study of Quoted Banks in Nigeria. The Nigerian Accountant, (50)2, 54-62, Available at SSRN: https://ssrn.com/abstract=2983640

Francis Udeh

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Mary-Fidelis Chidoziem Abiahu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Liberty Tambou

Nnamdi Azikiwe University Awka, Students ( email )

Ifite Awka
Nigeria

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