This study investigates the relationship that exists between corporate governance and firm
performance of some selected companies listed on the Nigerian Stock Exchange. The intent of
the study is to determine whether corporate governance mechanisms- CEO duality, board size
audit committee independence, and ownership concentration have an impact on firm performance surrogated by return on assets (ROA); return on equity (ROE), profit margin (PM).
It provides empirical evidence for fifty two (52) non-financial firms in Nigeria for a period of
2003 to 2008. The Generalised Least Square (GLS) regression is employed to examine the
relationship existing between the variables. The results reveal that board size, audit committee
independence, ownership concentration have a significant relationship with return on equity and
profit margin. It is also observed that CEO duality has no impact on firm performance. The
advocacy is for the Securities and Exchange Commission to take into cognisance industry
specific effects before formulating codes of corporate governance that determine the characteristic of the audit committee or the board structure. Proposition is also made for the
Corporate Governance Committee of companies to endeavour to do a regular appraisal of their
corporate governance compliance status so as to understand its effect on performance.
Keywords: Corporate Governance, Firm performance, Agency Theory, Agency Costs
CORPORATE GOVERNANCE AND FIRM PERFORMANCES
ABSTRACT