Abstract
The purpose of this study was to investigate the connection between corporate governance attributes and firm financial growth in Nigeria. The study was centered on the financial sector in Nigeria and the specific objectives of the study were to determine whether corporate governance attributes - board size, audit committee independence, ownership structure, and audit committee size have any impact on the financial growth of listed Deposit Money Banks (DMB) in Nigeria.
The study used secondary data from the financial statements and annual reports of the listed Deposite Money Banks (DMB), the population is the financial sector in Nigeria and used sample size for the relevant years under consideration (2014-2023), and uses the panel least square regression technique. The data will be tested for stationarity or non-stationarity issues using time series analysis.
The analysis revealed a significant negative relationship between board size and firm growth, with a coefficient value of -0.02. This suggests that larger board sizes are associated with a reduction in firm growth. Interestingly, while audit committee size was found to have a positive coefficient value of 0.01, indicating a potential positive impact on firm growth, the variable was not statistically significant at the 5% level. Similarly, audit committee independence was found to have a positive coefficient value of 0.006 but was not statistically significant. Meanwhile, ownership structure was found to have a significant positive impact on firm growth, with a coefficient value of 0.07. This suggests that higher ownership concentration is associated with increased firm growth. Given the observed negative impact of larger board sizes on firm growth, organizations should consider optimizing their board composition by focusing on quality over quantity. This may involve conducting regular board evaluations to assess the effectiveness of individual board members, identifying areas for improvement, and actively seeking diverse expertise and perspectives that can contribute to more strategic decision-making processes.
The purpose of this study was to investigate the connection between corporate governance attributes and firm financial growth in Nigeria. The study was centered on the financial sector in Nigeria and the specific objectives of the study were to determine whether corporate governance attributes - board size, audit committee independence, ownership structure, and audit committee size have any impact on the financial growth of listed Deposit Money Banks (DMB) in Nigeria.
The study used secondary data from the financial statements and annual reports of the listed Deposite Money Banks (DMB), the population is the financial sector in Nigeria and used sample size for the relevant years under consideration (2014-2023), and uses the panel least square regression technique. The data will be tested for stationarity or non-stationarity issues using time series analysis.
The analysis revealed a significant negative relationship between board size and firm growth, with a coefficient value of -0.02. This suggests that larger board sizes are associated with a reduction in firm growth. Interestingly, while audit committee size was found to have a positive coefficient value of 0.01, indicating a potential positive impact on firm growth, the variable was not statistically significant at the 5% level. Similarly, audit committee independence was found to have a positive coefficient value of 0.006 but was not statistically significant. Meanwhile, ownership structure was found to have a significant positive impact on firm growth, with a coefficient value of 0.07. This suggests that higher ownership concentration is associated with increased firm growth. Given the observed negative impact of larger board sizes on firm growth, organizations should consider optimizing their board composition by focusing on quality over quantity. This may involve conducting regular board evaluations to assess the effectiveness of individual board members, identifying areas for improvement, and actively seeking diverse expertise and perspectives that can contribute to more strategic decision-making processes.
