CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF QUOTED NIGERIAN DEPOSIT MONEY BANKS

ABSTRACT

This study examines the impact of corporate governance on the financial performance of banks in Nigeria. The research specifically investigates the relationship between board size, board independence, and audit committee size, and the return on equity (ROE) of UBA, Access, Sterling, Zenith, and Union Bank. ROE is used as a proxy for financial performance. The study employs various econometric techniques to analyze the data collected from the selected banks over the period from 2013 to 2022, specifically the study adopts the OLS panel (REM) regression. The study revealed that board size and board independence have a positive and significant impact on ROE. On the other hand, the study finds that audit committee size has a negative and insignificant impact on ROE. This suggests that the size of the audit committee does not significantly influence the financial performance of the banks under investigation. Based on these findings, it is recommended that banks in Nigeria should carefully consider the composition of their boards, ensuring a balance between size and expertise. The appointment of independent directors should be prioritized to bring objectivity and diverse perspectives to board decision-making processes. These recommendations put forth can guide banks in enhancing their corporate governance practices and ultimately improving their financial performance.