Corporate Governance Characteristics and Firm Performance of Manufacturing Firms in Nigeria: A Panel Data Approach

Authors

  • Egu Usang Inah Department of Accounting, University of Calabar, Calabar, Nigeria
  • Egim Augustine Magam Department of Accounting, University of Calabar, Calabar, Nigeria
  • Bassey Bassey Ubi Department of Accounting, University of Abuja, Nigeria
  • Ukpe Essien Amos Department of Accounting, Akwa Ibom State University, Nigeria
  • Ubi Johnson Johnson Department of Accountancy, Federal Polytechnic, Ukana, Nigeria
  • Nkamare Stephen Ekpo Department of Banking and Finance, University of Calabar, Calabar, Nigeria

Keywords:

corporate governance characteristics, board size, board composition, audit committee size, directors ownership, performance

Abstract

The study empirically examined corporate governance characteristics and firm performance of manufacturing firms in Nigeria. The Specific objectives were: to ascertain the effect of Board size on performance of manufacturing firms in Nigeria, to investigate the effect of board composition on the performance of manufacturing firms in Nigeria, to examine the effect of audit committee size on the performance of manufacturing firms, to determine the effect of Directors ownership on the performance of manufacturing firms in Nigeria. The study employed ex-post facto design and secondary data was obtained from annual reports of manufacturing sector and Nigeria Exchange Group Fact Book for 2011 to 2021. In the analysis, panel data was adopted. The major findings of the study include Board size does not have significant effect on performance of the manufacturing firms in Nigeria; Board composition had a significant effect on performance of the manufacturing firms in Nigeria; Audit committee size had a significant effect on performance of the manufacturing firms in Nigeria; Board ownership does not have a significant effect on performance of the manufacturing firms in Nigeria. Based on the findings, the following recommendations were made: Management should increase their board composition and also employ foreign directors on their board so as to enhance their firms’ quality. Board size of firms in Nigeria should not be too large and must be made up of qualified professional who are conversant with oversight function. There should also be a combination of self-government regulation so as to detect rule violations and also monitor systemic problems for early solutions. Audit committee is considered one of the functional subcommittees on the board of organizations with the mandate of supervising and enforcing compliance with accounting and reporting policies. Therefore, reliable financial information should be based upon which investors and potential investors make informed economic decisions.

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Published

2024-08-27

Issue

Vol. 3 No. 4 (2024): August

Section

Articles