Corporate Governance Practices and Performance of Deposit Money Banks in Nigeria (Published)
Performance of deposit money banks in Nigeria. The specific objective of the study was to critically appraise the relationship between size of board of directors, composition of board members, frequency of board meetings and return on assets of deposit money banks in Nigeria. The data were sourced through secondary sources from annual reports and accounts of sampled deposit money banks in Nigeria. The stated Null Hypotheses were tested through data analysis by using the correlation analysis as analytical tool. The research findings reveal that board size has a positive and strong relationship with return on assets while board composition has a positive but moderately strong association with return on assets. Furthermore, frequency of board meetings has a negative and very weak relationship with return on assets of deposit money banks in Nigeria. The implication of the findings is that increased board size could result in the improvement of financial performance of deposit money banks. The research found that such increase in number of members of the board will generate the desired outcome if it centers on independent nonexecutive directors with wealth of corporate governance experience, sound and profitable contacts, good and relevant education. The negative relationship with frequency of board meetings implies that banks should begin to trim down on number of board meetings as research has found that frequent meetings signal a crisis or distress situation with perceptions of going concern issues and bank failure. The study recommends that new independent non-executive professionals with critical governance and management attributes could be introduced into the board to improve the quality of decisions, earnings and general performance. Frequency of Board Meetings should be reduced to save cost and time while virtual meetings should be called more often than physical meetings as distance is no longer a barrier.
Keywords: Banks’, Board Composition, Board Meetings, Board size, Financial Performance, Nigeria, Return on Assets
Effect of Corporate Governance on Financial Performance of Quoted Commercial Banks in Nigeria (Published)
This study investigates the impact of corporate governance on the financial performance of Nigeria’s publicly traded commercial banks. The objective of this study is to determine if board size, board female gender, and board independence have effect on the financial performance of quoted commercial banks in Nigeria. Five (5) quoted commercial banks in Nigeria was examined, ranging from the years 2011 to 2020. Secondary data was used and obtained from the bank’s annual reports published in Nigeria Exchange Group. Cross-Sectional research design was used, and the method of data analysis used was panel multiple regression. Findings revealed that board independence has a significant impact on financial performance ( return on assets) of quoted commercial banks in Nigeria but shows negative relationship with financial performance ( return on assets) of quoted commercial banks, study further revealed that board size has a negative relationship with bank’s financial performance (return on assets) but has significant value on the financial performance (return on assets) , findings also revealed that at least two female board members were represented in every corporate organization studied, female board membership has a positive relationship with banks’ financial performance (Return on Assets), but shows insignificant value on financial performance (return on assets). The study concluded and recommended that, despite some of the independent variables shows insignificant values, Board independent, Board size, Board female gender mechanisms continue to be a critical component of corporate governance in achieving any organization’s objectives, financial or otherwise.
Citation: Orumwense E.K. and Orumwense O. (2023) Effect of Corporate Governance on Financial Performance of Quoted Commercial Banks in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.11, No. 4, pp.1-14
Keywords: Banks’, Board Composition, Corporate, Governance, Nigeria, financial crisis
Corporate Governance and Audit Quality in Nigeria: Evidence from the Banking Industry (Published)
This study examined the relationship between corporate governance and the quality of auditor’s report with evidence from the Nigerian Banking Industry. The research design adopted for this study is the ex-post facto as the research relied on historic data. Eleven (11) deposit money banks quoted on the Nigerian Stocks Exchange were sampled. In testing our hypothesis, the correlation analysis was applied to a dataset covering seven (7) years from 2007 to 2014 that is the post-corporate governance period. Analysis suggests that while board composition has a negative and insignificant relationship with audit quality, separation of the roles of the CEO from that of the chairman of the board, board size, and composition of the audit committee has positive and significant relationship with audit quality. Furthermore, findings also show that ownership concentration has a positive but insignificant relationship with audit quality. Findings also show that the strength of the positive linear relationship between the separation of the roles of the CEO from that of the chairman of the board and the audit quality is as high as 0.702377 or 70.23% followed by the relationship between board size and audit quality which stood at 0.452896 or 45.28%. However, the study thus concludes that effective corporate governance arises out of responsible and simultaneous vigilant actions by the managers, the board of Directors, shareholders and auditors. Good financial Reporting from the external auditors is an important building block of corporate governance because the information provided to the shareholders has to be optimal in terms of cost and benefits. The study also recommends that the relationship between management and shareholders have to be characterized by transparency and fairness.
Keywords: Audit Quality, Board Composition, Board size, Corporate Governance, Nigeria