Corporate Governance and Performance of Listed Firms in Nigerian Exchange Group

Abstract

The performance of listed firms in Nigeria is a topic of significant concern and interest among stakeholders, including investors, regulators, and policymakers. Despite the considerable growth and development of the Nigerian economy in recent years, some persistent challenges and issues affect the performance of listed firms, hindering their ability to achieve optimal results and contribute effectively to economic prosperity. There is a growing need to explore the relationship between corporate governance mechanisms and firm performance in Nigerian firms.The study adopted an ex-post facto research design, extracting secondary data from the annual reports of 153 companies listed on the Nigerian Exchange Group (NGX) that made up the study's population. Using a purposive sampling approach, 10 firms were chosen across different industries as the sample size. The scope spanned from 2013 to 2021, a period of nine years, and data underwent descriptive and inferential statistical analyses. The empirical investigations found that board size had a positive significant effect on return on assets, while the number of non-executive directors had a negative significant effect on return on assets. The overall results demonstrated that corporate governance had a significant effect on the firm performance. The findings suggest that companies adhering to robust corporate governance standards tend to excel across various performance metrics compared to those with weaker governance practices. This study recommends that Policymakers of Nigerian firms should consider optimizing board size to enhance performance, ensuring a balance between diversity and efficiency.