Corporate Governance and Financial Performance: An Empirical Investigation of Money Deposit Banks in Nigeria

Abstract

This study examined the impact of corporate governance mechanisms on financial performance of  selected Money Deposit Banks in Nigeria. The data used for this study were derived from the audited finance statements of the firms listed on the Nigerian Stock Exchange (NSE) from 2011 – 2017 which comprises of fifteen (15) listed banks as sample size for the study. Panel data methodology was adopted because its combined time series and cross-sectional data. The method of analysis is that of multiple regressions and the method of estimation is Ordinary Least Squares (OLS).  The result of the study revealed that corporate governance mechanisms jointly contribute to financial performance of Nigeria banks. Moreover, result also revealed that directors' equity interest and the corporate governance disclosure contributed positively to earnings per share and return to equity, while, board size has negative impact of earnings per share and return on equity respectively.  The paper recommended that management should improve efforts on corporate governance by focusing on the value of the stock ownership of Board Members. Also, an effective legal framework that specifies the rights and obligations of a bank, its directors, and shareholders should be developed; such frameworks should specify disclosure requirements and provide for effective enforcement of the law.