OZORDI, EMMANUEL EBUBECHUKWU and Covenant University, Theses (2022) GOVERNANCE COST, PAY DISPARITY AND FINANCIAL FIRMS’ EFFICIENCY IN NIGERIA. ["eprint_fieldopt_thesis_type_phd" not defined] thesis, COVENANT UNIVERSITY.
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Abstract
Organisation must factor in governance costs as they aspire to build a sustainable business. The consistent agency problems need attention within the financial firm operations in this sensitive era. Therefore, this study examined the impact of governance cost and pay disparity on financial firms' efficiency. The study selected 40 out of the 50 financial firms on the Nigeria stock market. The study employed Saunders, Lewis and Thornhill, (2019) sampling technique formula because it ensured an adequate representation and selection process of the firms within its sub-sector. The study adopted an ex-post-facto research design. Data was collected using secondary sources from the firms’ annual reports for nine years (2012-2020). The efficiency scores were measured using the Data Envelopment Analysis (DEA), factoring two input variables (Total Assets and Total Equity) and Output variables (Gross premium, Net premium, underwriting losses or gains). Consequently, firms with an efficiency score of (1) served as the benchmark for an efficient firm operation in which other similar firms could emulate. The study found that Banks and Investment firms approached the threshold on the efficiency scores while insurance firms operated below the average benchmark score point in aggregate. The outcome suggests that insurance firms are not performing optimally. Additionally, the study utilised the Panel Tobit regression to test the hypotheses and found a significant influence amidst the constructs. The findings from the study showed that the current governance cost positively influences the efficiency of the sampled firms. In the same vein, pay disparity had a positive influence on the sampled firms’ efficiency. The study found a widen pay gap between directors pay packages and other staffs pay packages on an average. Despite these wide ratios the sampled firms performed optimally. Furthermore, governance cost across corporate life cycle exhibited an adverse influence on financial firm’s efficiency which suggest that raising the cost of governance without factoring the corporate life cycle will be detriment to the efficiency than improving it. Therefore, the study concluded that governance cost and pay disparity significantly influence financial firms’ efficiency and recommended that the current budgetary provision on financial firms’ governance costs is sufficient to drive efficiency. However, an increase won’t affect the firms’ efficiency, but the consistent increase without paying attention to the corporate life cycle of the firm will affect the firms’ efficiency negatively. Hence, Managers should consider a periodic and structural approach this will help moderate the increment with the corporate life cycle pathway per time. The study recommends that the current pay structure should be managed to ensure that all segments contribute to efficiency over time.
| Item Type: | Thesis (["eprint_fieldopt_thesis_type_phd" not defined]) |
|---|---|
| Uncontrolled Keywords: | Corporate lifecycle, Data Envelopment Analysis, Governance Cost, Pay Disparity, Performance Efficiency |
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | AKINWUMI |
| Date Deposited: | 12 Oct 2022 09:45 |
| Last Modified: | 12 Oct 2022 09:45 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/16323 |
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