Corporate Governance Attributes and Financial Performance of Quoted Deposit Money Banks in Nigeria
Main Article Content
Abstract
This study examined the relationship between corporate governance attributes and the financial performance of quoted Deposit Money Banks in Nigeria. The study was motivated by the growing importance of effective corporate governance in enhancing transparency, accountability, investor confidence, and the overall stability of the banking sector. Specifically, the study reviewed key corporate governance mechanisms, including audit committee effectiveness, board meetings, and board independence, and their influence on financial performance indicators such as Return on Assets (ROA), Earnings per Share (EPS), Return on Capital Employed (ROCE), and Total Assets. The study adopted a qualitative research design using the secondary method of data collection. Data were obtained from relevant textbooks, peer-reviewed journal articles, regulatory publications, and other credible online sources. The study was anchored on Agency Theory, which explains the role of corporate governance mechanisms in reducing agency conflicts between shareholders and management while promoting effective monitoring and accountability. Findings from the reviewed literature revealed that corporate governance attributes significantly influence the financial performance of quoted Deposit Money Banks, although the effects vary across different governance mechanisms and performance measures. Board independence was found to positively enhance profitability and capital efficiency, while frequent board meetings may produce mixed outcomes depending on organizational circumstances. The study further revealed that firm size moderates the relationship between corporate governance and financial performance, suggesting that governance structures are more effective when aligned with the operational characteristics of individual banks. The study concludes that corporate governance remains a fundamental driver of accountability, transparency, and financial sustainability in the Nigerian banking sector. It therefore recommends that quoted Deposit Money Banks should strengthen board independence, improve the effectiveness of audit committees, ensure optimal frequency of board meetings, and continuously align governance practices with regulatory requirements and international best practices to enhance financial performance and long-term organizational sustainability.
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References
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Bédard, J. & Gendron, Y. (2010). Strengthening the financial reporting system: Can audit committees deliver. International Journal of Auditing, 14(2), 174-210.
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Bhagal, S. & Black, B. (2002). The non-correlation between board independence and long-term firm performance. Journal of Corporation Law, 2(2), 231-274.
Bhimani, A. (2008). Making corporate governance count: the fusion of ethics and economic rationality, Journal (if Management and Governance, 12(2), 135-147.
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Bukar A. & Habila D. (2015). Impact of ownership structure on firm performance:Evidence from quoted deposit money banks in Nigeria. Nigerian Journal of Accounting Research, 11(1), 15-32.
Carcello, J. V., Hermanson, D. R., & Neal, T. L. (2002). Disclosures in audit committee
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Collier, P., & Gregory, A. (1999). Audit committee activity and agency costs. Journal of Accounting and Public Policy, 18(4-5), 311-332.
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Dalton, D, R. (2009). Number of directors and financial performance: A Meta-Analysis. The Academy of Management Journal, 42(6), 674-686.
Dalton,D., Daily, C.& Eli-Strand, A. (1999). Number of directors and financial performance: A metal analysis. Academy of Management Journal, /2(6),74-686.
Dauda, I. A. (2015). Effectiveness of audit committee practices and the value of listed quoted deposit money banks in Nigeria. European Centre for Research Training &Development 3(6), 80-90.
Davidson III, W. N., & Rowe, W. (2004). Intertemporal endogeneity in board composition and financial performance. Corporate Ownership and Control, 1(4), 49-60.
DeZoort, F. T., Hermanson, D. R., & Houston, R. W. (2002). Audit committees: how good are they?. Journal of Corporate Accounting & Finance, 13(4), 53-59.
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of management Review, 20(1), 65-91.
Dumitrascu, M. & Savulescu, I. (2012). Internal control and the impact on corporate governance, in Romanian listed companies Journal of Eastern Europe research in business & economics, 2(3), 21-29.
Abdulazeez, D. A., Ndibe, L. & Mercy, A. M. (2016). Corporate governance and financial performance of listed quoted deposit money banks in Nigeria. Journal of Accounting & Marketing, 5(1), 30-40.
Abrams, F. W. (1951). Management's responsibilities in a complex world. Harvard Business Review, 29(3), 29-34.
Adamu, D. A., Saleh M.B, & Muhammad, I. (2015). Assessment of the non-financial measures of performance of quoted deposit money banks in Nigeria. Journal of Accounting & Taxation 7(8), 132-136.
Afify, H. A. E. (2009). Determinants of audit report lag: Does implementing corporate governance have any impact?. Empirical evidence from Egypt. Journal of Applied Accounting Research, 10(1), 56-86.
Aggarwal, P. (2013). Impact of corporate governance on corporate financial performance. Journal of Business and Management, 13(3), 1 -5.
Ahiazu, A. I. (2006). Research process paper presented at seminar on advanced social research method by the international. Centre for Management Research and Training, 3(4), 1-14.
Ahmad, S. A. & Tukur, G. (2017). Corporate governance mechanism and firms' financial performance in Nigeria. Research Journal of Economic and Finance 3(7), 23-2930.
Ajala, O. A., Amuda, T. &Arulogun, L. (2012). Evaluating the effects of corporate governance on the performance of Nigerian banking sector. Review of Contemporary Business Research, 1(1), 32-42.
Akingunola, R. O., Adedipe, O. A. & Adekunle, O.A. (2015). The effect of corporate governance on bank’s performance in Nigeria. European Journal of Business and Social Sciences, 2(8), 89-111.
Akpan, E. S., & Riman, H. S. (2012). Does corporate governance affect bank profitability? evidence from Nigeria. American International Journal of Contemporary Research, 2(7), 135-145.
Akpan, N. (2007). Internal control and bank fraud in Nigeria. Economic Journal, 9(5), 118–132.
Al Ani, M. K. (2014). Effects of assets structure on the financial performance: Evidence form sultanate of Oman. Journal of US-China Public Administration, 11(2), 170-179.
Alexander, O. B., David, T. I., Musibau, A. A., & Adunola, O. O. (2015). Impact of corporate governance on firms’ performance. International Journal of Economics, Commerce and Management, 3(6), 635-653.
Al-Lehaidan, I. (2006). Audit committee effectiveness: Australia and Saudi Arabia (Doctoral dissertation, Victoria University).
Al-Matari, E. M., Al-Swidi, A. K., Faudziah, H. B., & Al-Matari, Y. A. (2012). The impact of board characteristics on firm performance: Evidence from nonfinancial listed companies in Kuwaiti stock exchange. International Journal of Accounting and Financial Reporting, 2(2), 310-332.
Andra, G. (2016). Do specific corporate governance attributes contribute to the quality of financial reporting?: Evidence from Romania. Journal of Economics, Business and Management 4(1), 15-22.
Anshuman, K., & Yatin, N. (2014).The effect of corporate governance on the performance of Indian banks. International Journal of Innovative Research & Development, 3(8), 34- 42.
Appah, C. (2019). Beyond cardinals and ordinals: A Constructionist account of other numeral constructions in Akan.
Appah, E. & Emeh, Y. (2013). Corporate Governance structure and timeliness of financial reports of quoted firms in Nigeria. European Journal of Business and Management, 5(32), 34-45.
Appah, E., & Appiah, K. Z. A. (2010). Fraud and development of sound financial institutions in Nigeria. Nigerian Journal for Development Research, 1(1), 49-56.
Arafat, I., & Rahman, Z. (2010). Ecosanitation: importance and experience from Bangladesh. Appropriate Water Supply, Sanitation and Hygiene (WASH) Solutions for Informal Settlements and Marginalized Communities, 105.
Ararat, M., Orbay, H., & Yurtoglu, B. B. (2010). The effects of board independence in controlled firms: Evidence from Turkey. Available at SSRN 1663403.
Arnold, G. (2005).Corporate financial management. Pearson Education limited.
Arthaud-Day, M. L., Certo, S. T., Dalton, C. M., & Dalton, D. R. (2006). A changing of the guard: Executive and director turnover following corporate financial restatements. Academy of management Journal, 49(6), 1119-1136.
Ayesha, C., Kumarihami, S. S. & Sewwandi, E. (2015). Corporate governance and earnings per shares: A study of Sri Lankan manufacturing companies. University of Kelaniya. Research Journal of Accounting, 2(1), 201-210.
Ayininuola, S. (2009). Leadership in corporate Governance. The Nigerian Accountant, 42(2), 22-28.
Azadi, M. (2013). The relationship between changes in asset structure and operating earnings in the Tehran Stock Exchange. Trends in Advanced Science and Engineering, 7(1), 30-34.
Azubuike, J.U.B. & Aggreh, M. (2014). Corporate governance and audit delay in Nigerian quoted companies. European Journal of Accounting, Auditing, and Finance Research, 2(10), 22-33.
Babatunde, M. A., & Olaniran, O. (2009). The effects of internal and external mechanism on governance and performance of corporate firms in Nigeria. Corporate ownership & control, 7(2), 330-344.
Bain, N. & Band, D. (1996). Winning ways through corporate governance. Palgrave Macmillan.
Baker, H. K. & Powel, G. E. (2005). Understandingfinancial management: A practical guide. Blackwell Publishing.
Bédard, J. & Gendron, Y. (2010). Strengthening the financial reporting system: Can audit committees deliver?. International Journal of Auditing, 14(2), 174-210.
Bédard, J. & Gendron, Y. (2010). Strengthening the financial reporting system: Can audit committees deliver. International Journal of Auditing, 14(2), 174-210.
Bedard, J., Chtourou, S. M. & Courteau, L. (2004). The effect of audit committee expertise, independence, and activity on aggressive earnings management Auditing: A Journal of Practice and Theory, 23(2), 13-35.
Berglof, E. & Claessens, S. (2006). Enforcement and good corporate governance practices in developing countries and transition economies. The World Bank Research Observer, 21(1), 123–150.
Berle, S. S. & Means, G. C. (2011).The modern corporation and private property. Macmillan.
Bhagal, S. & Black, B. (2002). The non-correlation between board independence and long-term firm performance. Journal of Corporation Law, 2(2), 231-274.
Bhimani, A. (2008). Making corporate governance count: the fusion of ethics and economic rationality, Journal (if Management and Governance, 12(2), 135-147.
Black, P. (2002). Testing: friend or foe?: theory and practice of assessment and testing. Routledge.
Boo, E. F., & Sharma, D. (2008). Effect of regulatory oversight on the association between internal governance characteristics and audit fees. Accounting and Finance, 48(1), 51-71.
Bowen, M. L., Lim, N. C., Ewart, C. B., Misri, R., Ferreira, C. L., Häfeli, U., ... & Orvig, C. (2009). Glucosamine conjugates bearing N, N, O-donors: potential imaging agents utilizing the [M (CO) 3]+ core (M= Re, Tc). Dalton Transactions, (42), 9216-9227.
Brammer, S. & Millington, A. (2008). Does it pay to be different, an analysis of the relationship between corporate social and financial performance. Strategic Management Journal, 29(12), 1325-1343.
Broyles, J. (2003).Financial management and real options. John Willey and Sons Limited.
Bukar A. & Habila D. (2015). Impact of ownership structure on firm performance:Evidence from quoted deposit money banks in Nigeria. Nigerian Journal of Accounting Research, 11(1), 15-32.
Carcello, J. V., Hermanson, D. R., & Neal, T. L. (2002). Disclosures in audit committee
Chandra, P. (2008). Fundamentals of financial management. McGraw-Hill Publishing Company limited.
charters and reports. Accounting Horizons, 16(4), 291-304.
Chinedu, E. F., & Chidoziem, A. M. (2017). Audit firm report and financial performance of money deposit money banks in Nigeria. The Nigerian Accountant, 1(3), 40-50.
Coleman-Kyereboah. A. (2017). International conference on corporate governance in emerging markets. Research Journal of Finance and Accounting, 9(8), 55-60.
Collier, P., & Gregory, A. (1999). Audit committee activity and agency costs. Journal of Accounting and Public Policy, 18(4-5), 311-332.
companies in Malaysia. Journal of Business Systems, Governance and Ethics, 3(1), 35-53.
Conger, J., & Lawler, E. E. (2009). Sharing leadership on corporate boards: A critical requirement for teamwork at the top. Marshall School of Business Working Paper No. MOR, 19-09.
Dalton, D, R. (2009). Number of directors and financial performance: A Meta-Analysis. The Academy of Management Journal, 42(6), 674-686.
Dalton,D., Daily, C.& Eli-Strand, A. (1999). Number of directors and financial performance: A metal analysis. Academy of Management Journal, /2(6),74-686.
Dauda, I. A. (2015). Effectiveness of audit committee practices and the value of listed quoted deposit money banks in Nigeria. European Centre for Research Training &Development 3(6), 80-90.
Davidson III, W. N., & Rowe, W. (2004). Intertemporal endogeneity in board composition and financial performance. Corporate Ownership and Control, 1(4), 49-60.
DeZoort, F. T., Hermanson, D. R., & Houston, R. W. (2002). Audit committees: how good are they?. Journal of Corporate Accounting & Finance, 13(4), 53-59.
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of management Review, 20(1), 65-91.
Dumitrascu, M. & Savulescu, I. (2012). Internal control and the impact on corporate governance, in Romanian listed companies Journal of Eastern Europe research in business & economics, 2(3), 21-29.