Table of Contents
Abstract. 2
CHAPTER ONE. 5
INTRODUCTION.. 5
1.1 Background to the Study. 5
1.2 Statement of the Problem.. 6
1.3 Objectives of the Study. 7
1.4 Research Questions. 8
1.5 Research Hypothesis. 8
1.6 Significance of the Study. 9
1.7 Scope of the Study. 9
1.8 Limitations of the Study. 10
1.9 Organization of the Study. 10
CHAPTER TWO.. 12
REVIEW OF RELATED LITERATURE. 12
2.1 Introduction. 12
2.2 Theoretical Review.. 13
2.2.1 Agency Theory. 13
2.2.2 Stakeholder Theory. 13
2.2.3 Resource Dependence Theory. 14
2.2.4 Institutional Theory. 14
2.3 Conceptual Review.. 15
2.3.1 Overview.. 15
2.3.2 Theoretical Framework. 15
2.3.3 Corporate Governance. 15
2.3.4 Financial Performance Metrics. 16
2.3.5 Challenges to Corporate Governance. 16
2.3.6 Impact of Corporate. 16
2.3.7 Regulatory Landscape. 17
2.3.8 Stakeholder Perspectives. 17
2.3.9 Corporate Social Responsibility (CSR) Initiatives. 17
2.4 Empirical Review.. 18
2.5 Summary of Chapter. 20
Chapter Three. 20
Research Methodology. 20
3.1 Introduction. 20
3.2 Research Design. 21
3.3 Population and Sample. 21
3.3.1 Sampling Technique. 21
3.4 Data Collection Methods. 22
3.4.1 Primary Data. 22
3.4.2 Secondary Data. 22
3.5 Instrumentation. 22
3.5.1 Interview Guide. 23
3.6 Validity and Reliability. 23
3.6.1 Validity. 23
3.6.2 Reliability. 23
3.7 Data Analysis Techniques. 23
3.7.1 Quantitative Analysis. 23
3.7.2 Qualitative Analysis. 24
3.8 Ethical Considerations. 24
3.9 Limitations of the Study. 24
3.10 Conclusion. 24
CHAPTER FOUR. 25
4.1 Data Presentation and Analysis. 25
TABLES BASED ON RESEARCH QUESTIONS. 30
4.3 Analysis of the Respondents’ Views on Research Question one:. 30
4.4 Testing Hypothesis. 43
Discussion of Findings. 45
CHAPTER FIVE. 48
SUMMARY CONCLUSION AND RECOMMENDATION.. 48
5.1 Summary. 48
5.2 Conclusion. 50
5.3 Recommendations. 51
REFERENCES. 53
Research Questionnaire. 56
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Top of Form
Bottom of Form
Corporate governance practices play a pivotal role in shaping the financial performance and overall success of companies operating in diverse economic landscapes. Within the context of Nigerian listed companies, the examination of corporate governance frameworks becomes imperative due to the dynamic nature of its business environment and the significance of robust governance structures in ensuring transparency, accountability, and sustainability. This introduction seeks to explore the interplay between corporate governance practices and financial performance within the Nigerian corporate landscape, shedding light on the mechanisms through which effective governance contributes to enhanced financial outcomes. Agbonifoh, B. A. (2018).
Nigeria, as one of the leading economies in Africa, has witnessed a burgeoning interest in corporate governance practices as a means to foster investor confidence, attract foreign investments, and drive sustainable growth. With the Nigerian Stock Exchange (NSE) serving as a vital platform for companies to raise capital and expand their operations, the need for stringent governance standards cannot be overstated. As such, an in-depth analysis of the relationship between corporate governance mechanisms, such as board composition, executive compensation, and disclosure practices, and financial performance metrics becomes imperative to understand the efficacy of existing governance frameworks and identify areas for improvement. Okoye, L. U., & Ezejiofor, R. A. (2019).
Furthermore, the unique socio-economic and regulatory landscape of Nigeria introduces distinctive challenges and opportunities concerning corporate governance. Factors such as political instability, regulatory gaps, and cultural nuances influence the adoption and implementation of governance practices within Nigerian listed companies, necessitating a nuanced approach to evaluation. By examining empirical studies, case analyses, and regulatory frameworks, this study aims to provide insights into the effectiveness of corporate governance mechanisms in navigating these complexities and enhancing financial performance outcomes. Olaniyan, O. S., & Aramide, K. O. (2020).
1.2 Statement of the Problem
Despite the growing recognition of the importance of corporate governance in enhancing financial performance, Nigerian listed companies continue to grapple with various challenges in implementing effective governance practices. One prominent issue is the lack of clear regulatory frameworks and enforcement mechanisms, leading to inconsistencies in governance standards across companies. This regulatory ambiguity creates a breeding ground for governance lapses, including boardroom inefficiencies, inadequate risk management, and insufficient transparency, which in turn can adversely affect financial performance and investor confidence (Olatunji & Olayinka, 2023). Additionally, cultural factors and traditional business practices prevalent in Nigeria may hinder the adoption of modern governance principles, further exacerbating governance-related challenges and impeding the realization of optimal financial outcomes (Okoye & Ezejiofor, 2022).
Furthermore, the dynamic nature of the Nigerian business environment, characterized by political instability, economic volatility, and technological advancements, presents additional complexities in evaluating the impact of corporate governance on financial performance. Companies operating in such environments often face heightened uncertainties and risks, necessitating robust governance structures to mitigate these challenges effectively. However, the extent to which existing governance mechanisms in Nigerian listed companies effectively address these complexities and contribute to sustained financial performance remains unclear. Moreover, the dearth of empirical research specifically focusing on the Nigerian context limits our understanding of the nuanced relationship between corporate governance practices and financial outcomes, hindering the development of targeted interventions and best practices tailored to the Nigerian corporate landscape (Ujunwa & Chinenye, 2021).Top of FormBottom of Form
1.3 Objectives of the Study
The main objective of the study is to examine Evaluation of Corporate Governance Practices and Financial Performance in Nigerian Listed Companies. Specific objectives of the study are:
- To analyze the impact of board composition on financial performance
- To examine the effectiveness of audit committee practices on financial performance
- To investigate the influence of ownership structure on financial performance.
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- Does the presence of a higher percentage of independent directors on the board lead to improved financial performance of Nigerian listed companies?
- Does the frequency of audit committee meetings correlate with a lower incidence of financial reporting irregularities in Nigerian listed companies?
- Does a higher level of institutional investor ownership contribute to a more long-term strategic focus and improved financial performance of Nigerian listed companies?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no statistical significant relationship between Corporate Governance Practices and Financial Performance in Nigerian Listed Companies.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Accounting sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to Lafarge. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
