Corporate Governance and Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

Good corporate governance practice is required for effective management of organizational resources particularly in banking industry where there is management/shareholders separation. Since the introduction of corporate governance code after the CBN consolidation exercise in 2005, corporate governance has attracted an unprecedented attention of researchers. However, efforts aimed at improving corporate governance practice in Nigerian banking industry are yet to yield the desired result. It is against this basis that the study examines the impact of corporate governance on the financial performance of all listed deposit money banks in Nigeria for a period of seven (7) years (after consolidation). Data for the study were quantitatively retrieved from the annual reports and accounts of the studied banks. Regression analysis was used to analyze the data and it was found that larger board size contributes positively and significantly to the financial performance of deposit money banks in Nigeria. The study however, recommends among others that banks should increase their board size but within the maximum limit set by the code of corporate governance.