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Appraisal of Corporate Internal Governance Mechanism and Banks’ Metrics in Nigeria

Olokoyo, F. O. and Isibor, Areghan Akhanolu and Okoye, Lawrence U. and Evbuomwan, Grace O. and Adegboye, F.B. and Agbogun, O. E. (2021) Appraisal of Corporate Internal Governance Mechanism and Banks’ Metrics in Nigeria. In: UN@75 THE FUTURE WE WANT. Covenant University, Covenant University, pp. 1-60. (In Press)

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This research work observed the relationship between corporate internal governance mechanism and the financial metrics of banks in Nigeria. Over the years, emphasis has been placed on the use of eff ective governance to instill corporate discipline in maximizing stakeholders’ value. Using the performance information of five quoted banks in the Nigerian Stock Exchange with an aggregate of forty-five observations spanning from 2011 -2019 sample years, this study sheds some light on the degree of linearity of corporate internal governance measures such as board size, board composition, board independence, and bank liquidity on financial metrics of banks in Nigeria. The method of analysis adopted is the panel regression involving fixed eff ect estimation techniques. The correlation coefficient was used to measure the degree of association between our governance variables and profitability indices; while a robust estimator involving panel corrected standard error was applied. The estimated result for board size and board independence reveals a significant lag eff ect on bank performance. Board composition appears to have a significant inverse relationship with bank metrics which further suggests a low acceptance and adherence to cooperate governance by most banks with its resultant adverse eff ect on the bank metrics. Also, a statistical inverse relationship between the board size of a bank and its metrics was observed which suggests that increasing the size of the board of directors of a bank does not guarantee its performance. Hence, the study recommends that there is need for the regulatory authorities to reassess the procedures for the appointment of directors to the board in order to ensure uniform standards; transparency, accountability and stability exist in these financial markets.

Item Type: Book Section
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Management
Depositing User: Dr. Tolulope Adesina (Oladeji)
Date Deposited: 26 Jun 2021 06:14
Last Modified: 26 Jun 2021 06:14

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