Acta Universitatis Danubius. Œconomica, Vol 15, No 6 (2019)

Effect of Corporate Governance on Firm Performance in Nigeria

Odunayo Femi Ogunsanwo


The study examined the effect of corporate governance on firm performance in Nigeria. The study specifically investigate the extent to which board size affect firm performance; investigate the relationship between board independence and firm performance; ascertain the extent to which ownership structure influence firm performance; examine the relationship between board gender diversity and firm performance for the period of five years which covered 2013 to 2017. Data were sourced from Annual report and statement of financial accounts of the selected companies. Panel Data econometric technique which included least squares dummy variable (LSDV), random effect model and Hausman tests were employed. The model adopted return on asset (ROA) and return on equity (ROE) as the dependent variables while Ownership structure (OWNSTR), Board independence (BIND), Board size (BSIZE) and Board gender diversity (BGD) were used as the explanatory variables to capture corporate governance. The study found that board independence (BIND) has positive effect on return on asset while Ownership structure (OWNSTR), Board size (BSIZE) and Board gender diversity (BGD) on return on asset. The study further revealed that all the explanatory variables that is, Ownership structure (OWNSTR), Board independence (BIND), Board size (BSIZE) and Board gender diversity (BGD) have significant and positive effect on return on equity. The study concluded that corporate governance have significant effect on return on equity and it was recommended that size of the board (membership) should be increased but not exceeding the maximum number specified by the code of corporate governance for banks.


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