Corporate Governance and the Performance of Quoted Deposit Money Banks in Nigeria

Odey; Ferdinand Ite Ph.D; Egbai; Emmanuel Otei; Ph.D; Etim Bassey Effiom

doi:10.56201/jafm.vol.12.no6.2026.p191.205

📄 Download Paper

Corporate Governance and the Performance of Quoted Deposit Money Banks in Nigeria

Odey, Ferdinand Ite Ph.D, Egbai, Emmanuel Otei, Ph.D, Etim Bassey Effiom

Abstract

This study investigates the impact of corporate governance mechanisms on the financial and market-based performance of listed Deposit Money Banks in Nigeria. Utilizing a balanced panel dataset comprising 14 quoted DMBs on the Nigerian Exchange Group over a ten-year period from 2016 to 2025, the study employed multiple regression analysis within a panel data framework (Fixed and Random Effects models validated by the Hausman specification test). Corporate governance is operationalized through five structural attributes: Board Size , Board Independence , Board Gender Diversity , Board Diligence/Meeting Frequency and Audit Committee Effectiveness . Financial performance is evaluated using Accounting-based metrics-Return on Assets and Return on Equity alongside a market-based valuation proxy, Tobin’s Q (TQ). The findings reveal that Board Size has a positive and significant effect on accounting returns, indicating that larger boards in Nigerian banks leverage diversified institutional resources and advisory networks. Conversely, Board Independence exhibits an insignificant influence on bank performance, pointing to deep-seated institutional constraints where nominal independence does not translate into autonomous executive monitoring. Board Gender Diversity and Audit Committee Effectiveness exert positive and statistically significant impacts on performance metrics, proving that boardroom inclusivity and rigorous internal oversight mitigate systemic vulnerabilities and operational risks. Finally, Board Meeting Frequency displays a negative and significant relationship with performance, implying that excessive emergency meetings serve as a reactive mechanism to operational distress rather than a proactive planning channel. Based on these insights, the study recommends that the Central Bank of Nigeria and the Securities and Exchange Commission shift from rigid compliance-based monitoring to substantive oversight frameworks that preserve the functional autonomy of independent directors, foster gender mainstreaming and streamline board operations to enhance long-term shareholder value and sectoral stability.

Keywords

Corporate GovernanceDeposit Money BanksReturn on AssetsTobin’s QAgency TheoryPanel Data RegressionNigeria.

References

Adebayo, O. (2022). Governance dynamics in emerging markets. Heritage Press. Appah, E. (2022). Board characteristics and financial performance of DMBs in Nigeria. Journal of Business Studies, 15(1), 22–38. Bala, A. (2025). Corporate Governance and Bank Performance in Nigeria: Insights from Emerging Economy Dynamics. EIRA Publisher. Balarabe, M., et al. (2026). Board gender diversity and corporate performance in Nigeria. FUOYE Journal of Finance and Contemporary Issues, 3(2), 88–105. Central Bank of Nigeria. (2023). Corporate Governance Guidelines for Commercial, Merchant, Non-Interest, and Payment Service Banks. Abuja: CBN Press. Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder return. Australian Journal of Management, 16(1), 49–64. Ebimobowei, A., & Appah, E. (2022). Gender diversity and financial performance of listed firms in Nigeria. International Journal of Finance and Accounting, 11(2), 45–59. Ekele, A. B. (2026). Effect of board attributes on human capital disclosure of quoted deposit money banks in Nigeria. Journal of Economics, Business and Management, 14(2). Eugenia, O. N. (2026). Effect of board diversity on financial performance of listed deposit money banks in Nigeria. International Journal of Business and Law Research, 14(2), 12–25. Financial Reporting Council of Nigeria. (2018). Nigerian Code of Corporate Governance . Lagos: FRC. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. Jidenduh, C. C. (2026). Board attributes and its implications on the performance of deposit money banks in Nigeria. SEAHI Publications. Kafidipe, O., et al. (2021). Structural governance failures in Nigerian banks. Journal of Business Ethics and Governance, 9(4), 45–67. Odey, F. I., Owan, J. O. & Owan J. N. (2023). Financial indicators and stock market performance in Nigeria. Global Journal of Arts, Humanities and Social Sciences, 11(5), 53-69. Ogbeide, F. I., & Azuikpe, F. (2022). To what extent does corporate governance influence financial performance of banks in Nigeria? NDIC Quarterly, 37(3), 15–33. Olayiwola, T. G. (2025). Board characteristics and integrated reporting quality of deposit money banks in Nigeria: Moderating role of bank size. Journal of Business Development and Management Research, 7(1), 44–60. Olokoyo, F. O. (2019). Corporate governance and deposit money banks' performance in Nigeria. International Conference on Education and Social Sciences. Oti, P. A., Effiong, A. E. & Odey, F. I. (2017). Demographics and Taxation in Rural Cross River State. International Journal of Economics and Financial Management, 2 (3), 13- 26. Oyamendan, A. (2024). Internal audit governance and asset quality in Nigerian DMBs. Nigerian Journal of Financial Research, 11(2), 110–128. Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organizations: A Resource Dependence Perspective. Harper & Row.

Corporate Governance and the Performance of Quoted Deposit Money Banks in Nigeria

Abstract

Keywords

References

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT