Corporate Governance and Organizational Profitability: Empirical Evidence from Quoted Natural Resources Firms in Nigeria (2010-2015)

Proceedings of Faculty of Management Sciences' 2016 International Conference, Nnamdi Azikiwe University, Awka

16 Pages Posted: 28 Jul 2017 Last revised: 10 Sep 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Obi Chinyere

University of Nigeria Enugu Campus

Uche Egolum

Nnamdi Azikiwe University, Awka

Racheal Iliemena

Nnamdi Azikiwe University, Awka

Date Written: November 8, 2016

Abstract

Following the prominent accounting scandals and fraudulent financial reporting, the emphasis on the need for corporate governance sprung up to improve organizational profitability. The general objective of this study is to determine the relationship between corporate governance and organizational profitability with a focus on quoted natural resources firms in Nigeria from 2010-2015. Three specific objectives were derived also. The study is anchored on stakeholder, stewardship and agency theories. Three research questions and three hypotheses were formulated in line with the specific objectives. In pursuance of the objectives of the study, ex-post facto research design was adopted. The study worked with a sample size of five companies using panel sampling method. This study made use of secondary data obtained from the Nigerian Stock Exchange (NSE) fact book and annual reports and accounts. The relevant data were subjected to statistical analysis using Pearson coefficient of correlation, multiple regression analysis and heteroskedasticity test. The result of this study reveals that there is a positive and significant relationship between corporate governance and organizational profitability. The results reveal that board size, audit committee independence and board ownership have a significant relationship with Return on Equity, Return on Assets and Profit Margin of quoted natural resources firms in Nigeria.

Keywords: Corporate Governance, Profitability and Audit Committee Independence

JEL Classification: M15, M24, M33

Suggested Citation

Amahalu, Nestor and Obi, Juliet and Egolum, Uche and Iliemena, Rachael, Corporate Governance and Organizational Profitability: Empirical Evidence from Quoted Natural Resources Firms in Nigeria (2010-2015) (November 8, 2016). Proceedings of Faculty of Management Sciences' 2016 International Conference, Nnamdi Azikiwe University, Awka. Available at SSRN: https://ssrn.com/abstract=3008656

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Juliet Obi

University of Nigeria Enugu Campus ( email )

Department of Accountancy
Box 15540, Enugu
Enugu, NC Enugu 234
Nigeria

Uche Egolum

Nnamdi Azikiwe University, Awka ( email )

Enugu-Onitsha Expressway
PMB 5025
Awka, DE Anambra State 234
Nigeria
08039341212 (Phone)

Rachael Iliemena

Nnamdi Azikiwe University, Awka ( email )

Enugu-Onitsha Expressway
PMB 5025
Awka, DE Anambra State 234
Nigeria
08061671763 (Phone)

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