Description
Abstract
This study examines the effect of corporate governance on financial performance of money deposit banks in Nigeria. It adopted ex post factor research design, which made the use of secondary data in ensuring that data obtained are sufficient for a reasonable conclusion. Financial performance of banks was measured using Return on Assets (ROA) and corporate governance was measured using three variables: board size, board composition and audit committee. Partial correlation and regression was used to analyze the data using STATA version 11. The results showed that board size and board composition have a negatively and insignificantly impact on financial performance, while audit committee size have positive but insignificant effect on financial performance of deposit money banks in Nigeria. It also revealed that small board size (board of director) contributes positively and significantly to the financial performance of deposit money banks in Nigeria. The study recommends that banks should maintain relatively small board size dominated by outside directors within the provisions of the code of corporate governance for banks but the board should comprise of members, who are conversant with oversight function and having capacity to add significant value in decision making toward achieving greater performance.
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