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Corporate Governance and Financial Reporting Quality in Nigeria

Oreoluwa Blessing Omojola, Isibor Areghan (PhD), Okonkwo Doris Ngozi, Adeniyi Akinwumi John, Daga Dogara James

Abstract

This study explores the relationship between corporate governance practices and the quality of financial reporting in Cadbury Nigeria Plc, over a ten-year period (2014-2023). It focuses on the effects of board size (BSIZE), board composition (BCOMP) and directors' remuneration (DREM) on return on assets (ROA), serving as a proxy for financial reporting quality. Adopting an ex-post factor research design, the analyses relies on secondary data evaluated through trend analysis and multiple regression using e-views software. The regression results reveal that none of the corporate governance variables (BSIZE, $p=0.3812$ BCOMP, $p=0.9228$ or DREM, $P=0.4305)$ has a statistically significant impact on ROA. The overall model also lacks statistical significance $(p=0.520I)$ with limited explanatory power. These findings imply that structural governance variables do not substantially influence financial reporting outcomes. The study challenges the assumption that board independence automatically translates into better financial performance, urging firms to rethink governance reforms and consider broader operational and strategic initiates to drive financial improvement.

Keywords

Corporate GovernanceBoard SizeBoard CompositionDirectors' remunerationFinancial Reporting

References

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