Corporate Governance and the Performance of Nigerian Banks

John Emmanuel Isaac; Ibenta Steve Nkemdilim

doi:doi:10.11648/j.ijefm.20160402.11

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Corporate Governance and the Performance of Nigerian Banks

John Emmanuel Isaac, Ibenta Steve Nkemdilim

Received: 30 December 2015 Accepted: 25 January 2016 Published: 2 March 2016

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Abstract

Although the consolidation and regulatory reforms were initiated in the Nigerian banking industry in 2004, the expected improvement in the operational performance and efficiency in the banking system has not been reflected in the overall health of the economy. It is in the light of the above, that this research examined the relationships between corporate governance mechanisms and performance of banks in Nigeria. This study used secondary data derived from publications of Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and Security and Exchange Commission (SEC) from 2006 to 2014. The Pearson Correlation was used to assess the relationships between the corporate governance variables and banks’ performance. Statistical Package for Social Sciences (SPSS) was used for the analysis. The study observed that a significant negative relationship exists between board size, board composition and the financial performance of banks, while a positive and significant relationship was observed between directors’ equity holding and banks’ performance. The study concludes that, the directors’ equity holding is paramount in boosting the performance of banks in Nigeria. Thus, this study recommends that the regulatory authorities should make sure that all directors own a reasonable amount of equity in the banks they oversee as this will move them to do their best to enhance the performance of these banks.

DOI	10.11648/j.ijefm.20160402.11
Published in	International Journal of Economics, Finance and Management Sciences (Volume 4, Issue 2, April 2016)
Page(s)	39-45
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Corporate Governance, Bank Performance, Nigeria

References

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APA Style

John Emmanuel Isaac, Ibenta Steve Nkemdilim. (2016). Corporate Governance and the Performance of Nigerian Banks. International Journal of Economics, Finance and Management Sciences, 4(2), 39-45. https://doi.org/10.11648/j.ijefm.20160402.11

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ACS Style

John Emmanuel Isaac; Ibenta Steve Nkemdilim. Corporate Governance and the Performance of Nigerian Banks. Int. J. Econ. Finance Manag. Sci. 2016, 4(2), 39-45. doi: 10.11648/j.ijefm.20160402.11

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AMA Style

John Emmanuel Isaac, Ibenta Steve Nkemdilim. Corporate Governance and the Performance of Nigerian Banks. Int J Econ Finance Manag Sci. 2016;4(2):39-45. doi: 10.11648/j.ijefm.20160402.11

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@article{10.11648/j.ijefm.20160402.11,
  author = {John Emmanuel Isaac and Ibenta Steve Nkemdilim},
  title = {Corporate Governance and the Performance of Nigerian Banks},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {4},
  number = {2},
  pages = {39-45},
  doi = {10.11648/j.ijefm.20160402.11},
  url = {https://doi.org/10.11648/j.ijefm.20160402.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20160402.11},
  abstract = {Although the consolidation and regulatory reforms were initiated in the Nigerian banking industry in 2004, the expected improvement in the operational performance and efficiency in the banking system has not been reflected in the overall health of the economy. It is in the light of the above, that this research examined the relationships between corporate governance mechanisms and performance of banks in Nigeria. This study used secondary data derived from publications of Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and Security and Exchange Commission (SEC) from 2006 to 2014. The Pearson Correlation was used to assess the relationships between the corporate governance variables and banks’ performance. Statistical Package for Social Sciences (SPSS) was used for the analysis. The study observed that a significant negative relationship exists between board size, board composition and the financial performance of banks, while a positive and significant relationship was observed between directors’ equity holding and banks’ performance. The study concludes that, the directors’ equity holding is paramount in boosting the performance of banks in Nigeria. Thus, this study recommends that the regulatory authorities should make sure that all directors own a reasonable amount of equity in the banks they oversee as this will move them to do their best to enhance the performance of these banks.},
 year = {2016}
}

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TY  - JOUR
T1  - Corporate Governance and the Performance of Nigerian Banks
AU  - John Emmanuel Isaac
AU  - Ibenta Steve Nkemdilim
Y1  - 2016/03/02
PY  - 2016
N1  - https://doi.org/10.11648/j.ijefm.20160402.11
DO  - 10.11648/j.ijefm.20160402.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 39
EP  - 45
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20160402.11
AB  - Although the consolidation and regulatory reforms were initiated in the Nigerian banking industry in 2004, the expected improvement in the operational performance and efficiency in the banking system has not been reflected in the overall health of the economy. It is in the light of the above, that this research examined the relationships between corporate governance mechanisms and performance of banks in Nigeria. This study used secondary data derived from publications of Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and Security and Exchange Commission (SEC) from 2006 to 2014. The Pearson Correlation was used to assess the relationships between the corporate governance variables and banks’ performance. Statistical Package for Social Sciences (SPSS) was used for the analysis. The study observed that a significant negative relationship exists between board size, board composition and the financial performance of banks, while a positive and significant relationship was observed between directors’ equity holding and banks’ performance. The study concludes that, the directors’ equity holding is paramount in boosting the performance of banks in Nigeria. Thus, this study recommends that the regulatory authorities should make sure that all directors own a reasonable amount of equity in the banks they oversee as this will move them to do their best to enhance the performance of these banks.
VL  - 4
IS  - 2
ER  -

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Author Information

John Emmanuel Isaac

Department of Banking and Finance, Faculty of Management Sciences, Nnamdi Azikiwe University, Awka, Nigeria
Ibenta Steve Nkemdilim

Department of Banking and Finance, Faculty of Management Sciences, Nnamdi Azikiwe University, Awka, Nigeria

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APA Style

John Emmanuel Isaac, Ibenta Steve Nkemdilim. (2016). Corporate Governance and the Performance of Nigerian Banks. International Journal of Economics, Finance and Management Sciences, 4(2), 39-45. https://doi.org/10.11648/j.ijefm.20160402.11

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ACS Style

John Emmanuel Isaac; Ibenta Steve Nkemdilim. Corporate Governance and the Performance of Nigerian Banks. Int. J. Econ. Finance Manag. Sci. 2016, 4(2), 39-45. doi: 10.11648/j.ijefm.20160402.11

Copy | Download

AMA Style

John Emmanuel Isaac, Ibenta Steve Nkemdilim. Corporate Governance and the Performance of Nigerian Banks. Int J Econ Finance Manag Sci. 2016;4(2):39-45. doi: 10.11648/j.ijefm.20160402.11

Copy | Download

@article{10.11648/j.ijefm.20160402.11,
  author = {John Emmanuel Isaac and Ibenta Steve Nkemdilim},
  title = {Corporate Governance and the Performance of Nigerian Banks},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {4},
  number = {2},
  pages = {39-45},
  doi = {10.11648/j.ijefm.20160402.11},
  url = {https://doi.org/10.11648/j.ijefm.20160402.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20160402.11},
  abstract = {Although the consolidation and regulatory reforms were initiated in the Nigerian banking industry in 2004, the expected improvement in the operational performance and efficiency in the banking system has not been reflected in the overall health of the economy. It is in the light of the above, that this research examined the relationships between corporate governance mechanisms and performance of banks in Nigeria. This study used secondary data derived from publications of Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and Security and Exchange Commission (SEC) from 2006 to 2014. The Pearson Correlation was used to assess the relationships between the corporate governance variables and banks’ performance. Statistical Package for Social Sciences (SPSS) was used for the analysis. The study observed that a significant negative relationship exists between board size, board composition and the financial performance of banks, while a positive and significant relationship was observed between directors’ equity holding and banks’ performance. The study concludes that, the directors’ equity holding is paramount in boosting the performance of banks in Nigeria. Thus, this study recommends that the regulatory authorities should make sure that all directors own a reasonable amount of equity in the banks they oversee as this will move them to do their best to enhance the performance of these banks.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Corporate Governance and the Performance of Nigerian Banks
AU  - John Emmanuel Isaac
AU  - Ibenta Steve Nkemdilim
Y1  - 2016/03/02
PY  - 2016
N1  - https://doi.org/10.11648/j.ijefm.20160402.11
DO  - 10.11648/j.ijefm.20160402.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 39
EP  - 45
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20160402.11
AB  - Although the consolidation and regulatory reforms were initiated in the Nigerian banking industry in 2004, the expected improvement in the operational performance and efficiency in the banking system has not been reflected in the overall health of the economy. It is in the light of the above, that this research examined the relationships between corporate governance mechanisms and performance of banks in Nigeria. This study used secondary data derived from publications of Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and Security and Exchange Commission (SEC) from 2006 to 2014. The Pearson Correlation was used to assess the relationships between the corporate governance variables and banks’ performance. Statistical Package for Social Sciences (SPSS) was used for the analysis. The study observed that a significant negative relationship exists between board size, board composition and the financial performance of banks, while a positive and significant relationship was observed between directors’ equity holding and banks’ performance. The study concludes that, the directors’ equity holding is paramount in boosting the performance of banks in Nigeria. Thus, this study recommends that the regulatory authorities should make sure that all directors own a reasonable amount of equity in the banks they oversee as this will move them to do their best to enhance the performance of these banks.
VL  - 4
IS  - 2
ER  -

Copy | Download