Effect of Corporate Governance on Performance of Listed Nigerian Banks

Abstract

Good corporate governance plays an essential role in the operation of a company because it improves oversight, reduces the likelihood of scandals, broadens a company's access to external financing, ensures the effective distribution of resources, and cultivates better relationships among various stakeholders. Nevertheless, the findings of previous studies have been inconclusive about the impact of corporate governance on firm performance. This study investigated the effects of corporate governance on bank performance. The fixed-effect regression method was used to investigate the relationship between the independent and dependent variables. A sample size of 12 from a population of 22 listed commercial banks in Nigeria from 2011 to 2020 was adopted. Corporate governance was proxied by the Executive Officer's (CEO) age, tenure, board gender diversity, and meetings. Firm performance was measured by earnings per share. The results revealed that board gender diversity and meetings significantly negatively affect firm performance. In contrast, CEO age and tenure have an insignificant effect on bank performance. We recommend women be nominated to corporate boards based on their earlier achievements. This will ensure that only the most qualified people are on the boards.

Keywords: Firm performance, CEO age, CEO tenure, board meetings, board size, fixed-effect