Corporate Governance and Firms' Performance in Nigeria

The aim of this paper is to measure the relationship between corporate governance and the performance of firms in Nigeria. To achieve this objective, we use Return on equity, Net profit margin, Sales growth, Dividend yield, and Stock prices/values as the key variables that defined the performance of the firm. On the other hand, for the measure of corporate governance, we use Board Independence, Board size, audit independence, ownership, and the progressive practices of the company. The paper found that there is a high relationship between the board's size of the companies use in the study and their performances. On board composition, the study found that averages of 30 percent of all board members are outsiders which suggest that these boards are relatively not independent. They therefore show weak relationship in that direction. The study concludes that the more outsiders there are on a company's board, the better the performance in terms of return on equity. On CEO to serve as the chairman of the company, the study found that when a CEO also serves as the board chairman performance worsens. It is the recommendation of the paper that there should be on the average about 10 to 15 board members for a firm that is averagely large. The composition of the directors should be more outsiders, as there is evidence as to the relationship between the compositions of the directors to the performance of the firm. Furthermore, since performance worsens when the chief executive serves as the board chair, it is the recommendation of the paper that the two positions should be separated