Effect of Corporate Governance on the Performance of Listed Deposit Money Banks in Nigeria

Abstract

The study examined the impact of corporate governance on the financial performance of deposit money banks in Nigeria. The study looked at how corporate governance prevailing in commercial banks in Nigeria could signal the effectiveness of governance on financial performance. The study employed a longitudinal data design. It combines the features of cross-sectional and time-series designs in a research study. Judgmental sampling technique was used to collect a convenient sample to effectively represent the population while eliminating potential biases especially in surveys. The FUGAZ Banks, representing five commercial banks, were selected for this study. These include First Bank, Access Bank, Zenith Bank, UBA, and GTCO. Secondary data was utilized in this study and information for 2013 through 2022 were obtained from annual reports, accounts, and certain relevant NSE fact books from the Nigerian sampled companies. The study used panel regression to investigate how financial performance for the period was affected by corporate governance structure. Dynamic Panel data regression was used. The analysis indicates corporate governance i.e board size and audit committee have significant impact on the financial performance of money deposit banks in Nigeria. The study recommends that companies should carefully consider the size and composition of their boards, aiming for a balance between representation and efficiency. Audit committees should consist of independent directors with relevant expertise to effectively oversee financial matters.