This paper extends the prior studies on corporate performance by empirically exploring the impact of overall corporate
governance structure on firm performance. To unveil the objective of this study, firstly corporate governance index is built using
Principal Component Analysis with 6 (six) identified corporate governance mechanisms from prior studies and then examines its
effect on firms’ performance. This study draws a sample of twenty-four (24) financial companies from the listed financial institutions
in Nigeria for the period of 2013–2017. The formulated hypotheses are tested by employing static panel data estimators that
are Fixed effect and Random Effect Regression. The results reveal that while controlling for firms’ characteristics, constructed
corporate governance indicator has a significant and negative influence on the firm performance measured by Return on Asset
and Return on Equity. This finding supports that larger board, larger board committees and significant executive involvement
have a detrimental influence on the performance of firms. The result implies a weak corporate governance structure is detrimental
to higher financial performance amidst the weak institutions characterized in Nigeria context. That is, weaker corporate governance
exhibits lower financial performance. This study then recommends that the corporate governance structure in Nigeria
listed firms should be review with the intention to enhance the firm performance. Furthermore, it encourages the regulatory
agencies like Central Bank of Nigeria, National Insurance Commission and Securities and Exchange Commission, to monitor
the compliance of the listed firms to good governance endeavour.
Adegboye, A. (2020). Firm performance and condensed corporate governance mechanism: Evidence of Nigerian financial institutions. Afribary. Retrieved from https://afribary.com/works/firm-performance-and-condensed-corporate-governance-mechanism-evidence-of-nigerian-financial-institutions
Adegboye, Alex "Firm performance and condensed corporate governance mechanism: Evidence of Nigerian financial institutions" Afribary. Afribary, 18 Jun. 2020, https://afribary.com/works/firm-performance-and-condensed-corporate-governance-mechanism-evidence-of-nigerian-financial-institutions. Accessed 22 Nov. 2024.
Adegboye, Alex . "Firm performance and condensed corporate governance mechanism: Evidence of Nigerian financial institutions". Afribary, Afribary, 18 Jun. 2020. Web. 22 Nov. 2024. < https://afribary.com/works/firm-performance-and-condensed-corporate-governance-mechanism-evidence-of-nigerian-financial-institutions >.
Adegboye, Alex . "Firm performance and condensed corporate governance mechanism: Evidence of Nigerian financial institutions" Afribary (2020). Accessed November 22, 2024. https://afribary.com/works/firm-performance-and-condensed-corporate-governance-mechanism-evidence-of-nigerian-financial-institutions