Internal Corporate Governance Impact on Return on Equity in Financial Institutions in Nigeria

Abstract

The main focus of the study is to ascertain the impact of internal corporate governance on the performance of financial institutions in Nigeria. The study adopted the historical research method. All the listed money deposit banks and other financial institutions in Nigeria that are listed formed the population of the study while the sampling method used is the purposive sampling technique. The data used for the analysis were secondary having been collected from existing annual accounts and reports of the 16 listed banks and other financial institutions in Nigeria. The variables on which data were collected include Returns on Equity (dependent variable), and Board Size, Board Composition, Size of Audit committee, Attendance at Board Meeting, and Ownership Concentration (the independent variables) and the period covered is 2009-2018. The data was analysed using SPSS v. 20.0 where the main tools used were the correlation coefficient (r), coefficient of determination (R²), F-test statistic, and t-test statistic (used for the tests of hypotheses). All the tests of hypotheses have been carried out using 5% level of significance (otherwise called 95% confidence interval). The findings were the same for the five independent variables as none had significant impact Returns on Equity of financial institutions in Nigeria. The study recommended that financial institutions in Nigeria should do more than just paying lip service to the issue of board size, board composition, and audit committee size among others but to improve on the quality of such things that affect performance.