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Abstract of Corporate Governance and Firm Performance
This study investigates the relationship that exists between corporate governance andย firm performanceย of some selected companies listed on the Nigerian Stock Exchange. The intent of the study is to determine whether corporate governance mechanisms-ย CEO duality, board size audit committee independence, and ownership concentrationย have an impact onย firmย performanceย surrogated byย return on assets (ROA); return on equity (ROE), profit margin (PM).
It provides empirical evidenceย for fifty two (52) non-financial firms in Nigeria for aย period of 2003 toย 2008. Theย Generalised Least Square (GLS) regression is employed toย examineย the relationship existing between the variables.ย The results revealย thatย board size,ย audit committee independence, ownershipย concentration haveย aย significant relationshipย with return on equity andprofit margin. Itย is also observed thatย CEO duality has no impact onย firm performance.ย The advocacy is forย theย Securities and Exchange Commission to take into cognisance industry
specific effects before formulating codes ofย corporate governanceย that determine the characteristicย of the audit committee or the board structure.ย Proposition is also made forย theCorporate Governance Committeeย of companies toย endeavour to do a regular appraisal of their corporate governance compliance status so as to understand its effect on performance.
Certification—————————————————————-..iii
Declaration——————————————————–………………..iv
Dedication —————————————————————-….v
Acknowledgment————————————————.———-…..vi
Abstract————————————————.————.——..vii
Table of Contents————————————————————..ix
List of Figures ————————————————————–.xiv
List of Table ————————————————————–….xv
Chapter One: Introduction—————————————-.——–..–.1
1.0ย Background to the study———————————————-…..1
1.1ย Statement of Problem————————————————–..2
1.2ย Objectives of Study—————————————————-.3
1.3ย Research Questions————————————————–……4
1.4ย Hypotheses———————————————————-…4
1.5ย Scope of Study——————————————————–.4
1.6ย Significance of Study————————————————–…5
1.7ย Limitations of Study—————————————————-.6
1.8ย Methodology———————————————————-6
1.9ย Definition of Terms————————————————–……7
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Chapter Two: Literature Review—————————————-.–.—-.9
2.1ย Introduction ——————————————————–.–.9
2.2ย Conceptual Framework————————————————….10
2.2.1ย Agency Concept—————————————————-……10
2.2.2ย ย Corporate Governance Mechanisms for Reducing Agency Costs—————-..14
2.2.2.1 Board Size———————————————————-…14
2.2.2.2 CEO Duality——————————————————–….15
2.2.2.2 Ownership Concentration————————————————17
2.2.2.3 Audit Committee Independence——————————————..18
2.2.3ย Summary of Theory, Hypothesis and Conceptual Model———————-….19
2.3ย Theoretical Framework of Corporate Governance—————————-….21
2.3.1ย Stakeholder Theory—————————————————-…22
2.3.2ย Stewardship theory—————————————————-…22
2.3.3ย Resource Dependency Theory (RDT)————————————……22
2.3.4ย Agency theory——————————————————–…23
2.3.5ย Assumptions of Agency Theory——————————————….24
2.3.6ย Limitations of Agency Theory——————————————–..25
2.4.ย Measuring Firm Performance——————————————–….26
2.5ย Measuring Control Variables——————————————–.–28
2.5.1ย Company Size———————————————————-29
2.5.2ย Leverage————————————————————…..28
2.6ย Corporate Governance and Performance Measures—————————-…29
2.7ย Methodological Review————————————————–.31
2.8ย Corporate Governance Measures in Nigeria———————————-..32
2.8.1ย The Role of the Board of Directors, Chairman, and Chief Executive Officer——–..32
2.8.2ย The Role of the Audit Committee——————————————..33
Chapter Three: Research Methodology —————-.——————..——.34
3.1ย Introduction————————————————————34
3.2ย Research Design——————————————————–.34
3.3ย Population of Study—————————————————-…34
3.4ย Sample size and Sampling Technique————————————..–.34
3.5ย Data Gathering Method————————————————–..35
3.5.1ย Sources of Data——————————————————–. 35
3.5.2ย Instruments of Data Collection—————————————-..—-35
3.5.3ย ย Validity and Reliability of Instruments————————————–.35
3.6ย Data Analysis Method————————————————–…36
3.6.1ย Methods of Data Analysis————————————————.36
3.6.2ย Instruments for Data Analysis (Including formulae) —————————-36
3.6.3ย Model Specification—————————————————-…37
Chapter Four: Data Presentation and Analysis ——————–..——–.—-.. 39
4.1ย Introduction———————————————————-..39
4.2ย Data Presentation——————————————————..39
4.2.1ย Industry Based Presentation———————————————-.39
4.3ย Data Analysis ——————————————————–….41
4.3.1ย Summary Statistics——————————————————41
4.3.2ย Correlation Analysis—————————————————-..46
4.3.3ย Econometric Analysis—————————————————-47
Chapter Five: Summary, Findings, Conclusion And Recommendations————–..52
5.1ย Introduction———————————————————-..52
5.2ย Summary of Work Done————————————————…52
5.3ย Findings————————————————————–.53
5.3.1ย Theoretical Findings—————————————————-..53
5.3.2ย Empirical Findings——————————————————.54
5.4ย Conclusion ——————————————————–…–.55
5.5ย Recommendations——————————–..———————-55
5.6ย Suggestions for Further Studies—————————————-………56
References —-…——————————————————.58
Appendices ————————————————————–…–66
Appendix 1ย ย ย Sample Companies and Their Industries———————-.–66
Appendix 11ย ย Generalised Least Square Regression Result Of Estimated Model (Fixed
Effects) ————————————————–68
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