Analysis of The Role of Corporate Governance Mechanisms in Shaping the Financial Reporting Practices of MNEs in Nigeria (Published)
This study analysed the role of corporate governance on the quality of financial reporting practices of Multinational Enterprises (MNEs) in Nigeria. The study made use of managerial hegemony theory to establish a theoretical foundation in examining the effect of corporate governance mechanisms in the quality of the financial reporting practices of MNEs in Nigeria. Ex-post facto research design and panel regression were employed by the study. The study extracted data from the audited financial statement of 20 active MNEs in the consumer manufacturing sector listed on Nigeria Exchange Group (NGX). The population forms the sample size using census sampling. Findings revealed that the size of board, board independence, gender diversity and board shareholding did not significantly affect the quality of financial reporting practices of MNEs in Nigeria. Firm size and firm leverage significantly moderate the interaction between corporate governance and the quality of financial reporting practices of MNEs in Nigeria. The study concluded that this finding is a pointer to the fact that the quality of financial reporting of MNEs in Nigeria may be determined by factors other than corporate governance such as the adoption of International Financial Reporting Standard (IFRS), regulations, and Nigerian laws (CAMA 2020). Therefore, the study recommends that MNEs in the consumer sector in Nigeria should strengthen their corporate governance mechanism with the aim of improving the quality of financial reporting of their businesses in the short-run and the confidence of their customers and investors in the long-run.
Keywords: Board size, Corporate Governance, board gender diversity, board independent, board shareholding, financial reporting practices
Sustainability Reporting and Assets Quality of Listed Deposit Money Banks in Ghana, Kenya and Nigeria (Published)
Bank’s asset quality deteriorates when banks are exposed to high non-performing loans and associated credit risks. Sustainability reporting deepens the acceptability and understanding of huge opportunities and enhances the corporate competitive advantage of the banks in enhancing banks’ assets quality. This study investigated the effect of sustainability reporting on the assets quality of listed deposit money banks (DMBs) in Ghana, Kenya and Nigeria. The study explored secondary data, using a population of 95 listed DMBs, while a sample size of 31 DMBs was purposively selected for a period of 12 years. Data were extracted from the annual financial records of the banks and sustainability reporting checklist in line with the Global Reporting Initiative. The validity and reliability of the data were premised on the statutory audit of the financial statements. Descriptive and inferential (multiple regression) statistics were used to analyze the data at a 5% significant level. The study found that sustainability reporting significantly affected the assets quality of the listed deposit money banks in Ghana, Kenya and Nigeria (Adj R2 = 0.47, Wald-test (4, 367) = 342.18, p < 0.05). Based on the finding, the study recommended managers of the banks should exhibit high professional competence, and exercise managerial expertise and ethical practices in compliance with sustainability reporting best corporate best practices capable of enhancing the assets quality of the banks.
Keywords: Corporate Governance, Environmental, Social, assets quality, sustainability reporting
Corporate Governance and Market Value of Listed Manufacturing Firms in Nigeria (Published)
This paper examined the level of corporate governance compliance and its effect on the market value of listed manufacturing firms in Nigeria. The study adopted descriptive survey research design and used secondary data. The population of the study comprised of 78 listed manufacturing firms on the Nigeria Stock Exchange at the end of 2018. Using purposive sampling techniques, relevant data were obtained from 56 firms whose stocks were traded consistently on the stock market. Corporate governance practices and all other relevant economic data were obtained from the firm’s annual reports, the publication of the Nigeria Stock Exchange (NSE) as well as the website of the firms. The data were analyzed using tables, percentages and random effect estimation. The empirical and significant relationship between corporate governance index (t = 10.680 p < 0.001, t = 13.682 p < 0.001, and t = 11.206 p < 0.001) and firms’ value are found to be positive and highly significant in the three estimations. The study concluded that corporate governance is a value driver. The extended findings from the study also indicated that corporate governance mechanisms put in place by firms can ensure financial transparency and serve as catalyst towards ensuring proper utilization of the capital contributed to the firm by its inventors
Keywords: Corporate Governance, Tobin's Q
Retained Earnings, Corporate Governance and Market-To-Book Value of Listed Firms in Nigeria (Published)
The study analysed the importance of corporate governance practices in strengthening the relationship between retention policy and firm value from 2008 – 2018. The study adopted descriptive survey design and used secondary data. The population of the study comprised of 78 listed manufacturing firms on the Nigeria Stock Exchange as at the end of 2018. Purposive sampling technique was used to select firms with up-to-date published financial data and whose stocks were traded on the stock market totaling 56. The data were analysed using table, percentages and random effect estimation techniques. Findings from the analysis indicated that corporate governance index (t = 2.155, p<0.001), earnings per share (t=5.393, p<0.001) and retained earnings per share (t=9.761, p<0.001) were positively and significantly related to the market-to-book value of firms in Nigeria. The study therefore recommends that a higher level of retained profit of these firms together with efficient management practices through good governance will affect-their values positively.
Keywords: Corporate Governance, Earnings, market-to-book., retained earnings
Effect of Corporate Governance on the Earnings Management of Listed Manufacturing Firms in Nigeria (Published)
The study examined the effect of corporate governance on the earnings management of listed manufacturing companies in Nigeria. The specific objectives of the study were to investigatethe effect of board size, board gender diversity, board independence, audit committee size, and ownership structure onEarnings Management of Listed Manufacturing Companies in Nigeria. Ex-post facto research design was adopted while panel data was collected a sample of 19 consumer goods companies listed on Nigerian Stock Exchange.The Generalised Least Square Regression Model aided by STATA 14.2 statistical package as used to estimate the effect of corporate governance on the earnings management of listed manufacturing companies in Nigeria.The study found that board size had negative and no significant effect on earnings managementof listed manufacturing companies in Nigeria;board gender diversity hadnegative and no significant effect on earnings management of listed manufacturing companies in Nigeria; board independence had positive and no significant effect on earnings managementof listed manufacturing companies in Nigeria, audit committee size had positive and no significant effect on earning managementof listed manufacturing companies in Nigeria and ownership structure hadnegative and significant effect on earnings managementof listed manufacturing companies in Nigeria.The implications of the findings are that, the size of the firm’s corporate board does not influence the volatility in discretionary accruals within the period studied and moreso, the presence of female board members does not determine the earnings manipulation in the firms significantly.The study concluded that increase in the number of independent directors reduces the occurrence of earnings manipulation and the number of directors that make up the audit committee does not affect earnings policy of manufacturing firms.This affirms that directors’ holding many shares can influence the occurrence of earnings manipulation. The study recommended that board composition should include a greater proportion of independent outside directors with corporate experience. Independent directors’ ratio to the total board size should be more to allow unbiased decisions on the financial statements.
Keywords: Accruals, Corporate Governance, Earnings Management, Firms, Manufacturing
Audit Committee Characteristics and Non-Performing Loans in Nigerian Deposits Banks (Published)
This study examined empirically the impact of audit committee characteristics on non-performing loans in Nigerian Deposits banks. For the purpose of this research work, secondary data was used and the instruments of data collection were financial statements. The study adopts Ex-post factor research (after the fact) design. The population of the study is 15 banks according to the Nigerian Stock Exchange. The sample size is the entire population of the study. The Study made use of multiple regression analysis and specifically the panel data regression technique. The Hausman test was used to determine the suitable regression. The result of the Hausman test showed the random effect. The findings suggested that the inclusion of financial expertise in audit committee leads to reduced level of non-performing loans in listed banks in Nigeria. Although insignificant, the relationship between the audit committee meetings and non-performing loans also revealed a negative influence. While the influence of audit committee independence on non-performing loans revealed a positive relationship. Therefore, the study recommends that financial experts on the audit committee should take in cognizance of the negative effect of increased non-performing on the performance of the listed banks and the committee meetings should discussed the ways in which non-performing loans are reduced.
Keywords: Corporate Governance, Non-Performing Loans, audit committee characteristics
Corporate Governance and Commercial Banks’ Performance in Uganda (Published)
More than ten commercial banks have collapsed in Uganda in the last two decades due to problems such as frauds, insider lending by dominant shareholders, weak boards of directors, non-performing loans portfolios, and managerial opportunism. This paper aims to investigate the impact of corporate governance on commercial banks’ performance in Uganda. The study adopted a survey-based approach to purposively collect data from the respondents of all licensed commercial banks in Uganda at the time of the study. Data was collected using a self-administered research instrument on the most emphasized corporate governance variables of board composition, board size, capital adequacy ratio, and the independent audit committee for the performance of banks. The data quality control was ensured by establishing the internal consistency of the research instrument that resulted in an overall Cronbach’s reliability coefficient of 0.78. The data was analyzed using hierarchical multiple regression analysis statistical technique after controlling for bank size and leverage. Using an alpha level of 0.05, the study found that the change in R-squared was 27.9% with a non-significant change in F (4,14) = 1.64, p = 0.219. Secondly, for the whole model F (6,14) = 1.587, p = 0.223 which signified that was no significant impact of corporate governance on commercial banks’ performance in Uganda while controlling for bank size and leverage. In order to improve bank performance in Uganda, the central bank should step up the supervisory and regulatory policies. This would involve proactive strategies such as regular review of corporate governance instruments like the Financial Institutions Corporate Governance Regulations (2005) so as to counteract any new threats to the banking sector which could render these instruments ineffective.
Keywords: Commercial Banks, Corporate Governance, Performance, Uganda
Board Characteristics and Earnings Management: Empirical Analysis of UK Listed Companies (Published)
Present study investigates to find out the associations between characteristics of the boards and the level of earnings management. For the investigation, level of the earnings management has taken from UK listed companies during 2012 to 2016. Moreover, the abnormal accruals are considered as the proxy of the level of earnings management, and which show the level of earnings management for the companies. The study uses Modified-Jones model to measure the abnormal accruals, and uses Random effects model to find out whether the characteristics of the boards are related with the level of earnings management. By running the regression, it finds out that the CEO duality and board size are negatively related the level of earnings management at the significant level. However, the study fails to find out the board meetings, percentage of independent directors and the percentage of female directors in the board is significantly associated with the level of earnings management.
Keywords: Accruals, Corporate Governance, Earnings Management, dependent variables, independent variables
Sustainability Disclosures and Market Value of Firms in Emerging Economy (Published)
This study investigates how overall sustainability disclosures and it’s disaggregate dimensions of environment, social and governance affect market value of firms in Nigeria as an emerging economy using company’s’ specific disclosures. Tobins Q were used to proxy firm market value. The study selected 93 out of 120 non-financial firms listed on the Nigerian Stock Exchange as at 2015. Ex Post Facto research design was adopted and the secondary data was collected from annual reports of sampled firms from 2006 to 2015 through content analysis. The data were analysed with descriptive statistics, correlation analysis, principal component analysis while pooled ordinary least squares regression was employed to test formulated hypotheses. The analysis showed that overall sustainability disclosures have significant positive effects on firm value. When treated individually, environmental sustainability disclosures and corporate governance disclosures have a significant positive effect on market value of firm. The study also reveal that social sustainability disclosures have negative and insignificant effect on market value of firm. Based on these findings, the study recommended among other that companies should foster greater sustainability and long-term value creation by integrating sustainability metrics into their reporting model and strategy. Firms in Nigeria should adopt and disclose environmental friendly policies since it potray their commitment towards achieving the goal of sustainable development.
Keywords: Corporate Governance, Environmental Disclosure, Firm Value, Social Disclosures, Sustainability Disclosures
The Influence of Corporate Governance Attributes and National Characteristics on Information Disclosures: A Case of Asean (Published)
This paper aims to investigate the impact of corporate governance and national characteristics on disclosure practices in ASEAN. The multiple regression models were tested through EVIEWS 10 with an ordinary least squares (OLS) method. Empirical results report that the extent of corporate disclosure in ASEAN is positively associated with a number of board meetings, level of regulation quality and level of rule of law; but it is negatively related to board size, board independence, level of political stability and absence of violence, level of government effectiveness and level of control of corruption. The obtained results provide empirical evidence for the regulators who would like to enhance a flavor business environment within ASEAN. The paper contributes to the international disclosure literature by offering a new insight into the influence of corporate governance mechanisms and national characteristics on information disclosure practices in a group of developing countries.
Keywords: ASEAN, Corporate Disclosure, Corporate Governance, Listed Company, National Characteristics