Impact of Corporate Governance on Firm Performance – a Case Study of Deposit Money Banks
CHAPTER ONE
Objectives of the Study
The general objective of this study is to investigate the impact of corporate governance on firm performance. The specific objectives are to:
- i examine the composition of board members of the firms.
- ii analyse the effectiveness of the board meeting.
- iii determine the impact of corporate social responsibility on the performance of the firms.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Concept of Corporate Governance
There is no universally accepted definition of Corporate Governance which enjoys consensus of views in all scenarios and countries. Numerous researchers have viewed corporate governance from their own perspectives (Drobetz et al., 2004; Long et al., 2012a; Long et al., 2012b). Different definitions have been put forward by authors. The Code of Corporate Governance issued by Central Bank of Nigeria (2014) defines the subject as the rules, processes, or laws by which institutions are operated, regulated and governed. It is developed with the primary purpose of promoting a transparent and efficient system that will engender the rule of law and encourage division of responsibilities in a professional and objective manner. In Thailand, the National Corporate Governance Committee (NCGC) defined the term as a system having a corporate control structure combining strong leadership and operations monitoring. Its purpose is to establish a transparent working environment and enhance the company’s competitiveness. The Organization for Economic Cooperation and Development (OECD) also defines corporate governance as the system by which business corporations are directed and controlled. The Asian Development Bank defined the concept as the manner in which authority is exercised in the management of a country’s social and economic resources for development (Eng & Mak, 2003; Cheng, 2008; Cadbury, 2002). Corporate governance was described to be a way and manner in which the affairs of companies are conducted by those charged with that duty. In Nigeria, the governance of a limited liability company is the responsibility of its board of directors. Dozie (2003) believes that corporate governance is characterized by transparency, accountability, probity and the protection of stakeholders’ rights. Oyediran (2003) further observes that corporate governance refers to the manner in which the power of a corporation is exercised in the management of its total portfolio of socio and economic resources with the aim of increasing shareholders’ value and safeguarding the interest of other stakeholders in the context of its corporate mission.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain impact of corporate governance on firm performance – a case study of deposit money banks. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing an impact of corporate governance on firm performance – a case study of deposit money banks
Summary
This study was on impact of corporate governance on firm performance – a case study of deposit money banks. Three objectives were raised which included: examine the composition of board members of the firms, analyse the effectiveness of the board meeting and determine the impact of corporate social responsibility on the performance of the firms. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from UBA, Akwa Ibom state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
This study is considered to have achieved its main objective, which is to explore the relationship between corporate governance characteristics and financial performance of deposit money banks in Nigeria. However, the study therefore concludes that there is significant positive relationship between corporate governance characteristics(Audit committee meetings, Board meeting, Board size, Board composition and Gender diversity) and financial performance of Deposit money banks in Nigeria
Recommendation
The banks through its regulatory authority should increase the number of Audit committee meetings in a year since the audit committee meetings have a significant positive relationship with the financial performance of Deposit money banks in Nigeria.
The managements of deposit money banks in Nigeria, as a matter of fact, should try to increase the number of board meetings in a year, in order to increase its positive effect on financial performance of deposit money banks in Nigeria. Since board meeting has a significant positive relationship with financial performance of banks.
The banks should increase the board size (number of board members) in order to benefit from its positive effect on financial performance. Since board meetings have significant positive relationship with banks financial performance.
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