The Impact of Board Structure on Corporate Financial Performance in Nigeria

This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the composition of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board composition, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the composition of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance

Corporate Social Responsibility and Financial Performance in Developing Economies: The Nigerian Experience

Corporate social responsibility (CSR) has the potential to make positive contributions to the development of society and businesses. Organisations are beginning to see the benefits from setting up strategic CSR agendas. The increasing attention to CSR is based on its capability to influence firms’ performance. The CSR movement is spreading over the world and in recent years a large number of methods and frameworks have been developed, the majority being developed in the West. This study focuses on developing economies and on Nigeria specifically. Using a sample of forty audited financial statements of quoted companies in Nigeria, this study examines the impact of CSR activities on financial performance measured with Return on Equity (ROE) and Return on Assets (ROA). The results show that CSR has a positive and significant relationship with the financial performance measures. These results reinforce the accumulating body of empirical support for the positive impact of CSR on financial performance

The ethics of tax evasion: Perceptual evidence from Nigeria

Tax evasion has the effect of distorting the principle of perfect market resource allocation with rippling effects on the state of infrastructures. Tax evasion in most developing countries is so rampant and this development is much exacerbate by the fact that not many of these countries have made an effort to measure the ethical reasons that taxpayers give, the extent of this problem and at the same time analyze its impact. Thus, this study is directed towards understanding the behaviour of taxpayers towards tax evasion in Nigeria. The study made use of statistical test for population means and level of significance tests to evaluate the hypotheses formulated for the study. The study shows that the hypothesis that tax evasion is ethical sometimes is not accepted. The study also found that the level of tax evasion when government is corrupt is significantly higher than when it relates to other views expressed on government discrimination, unjust treatment and tax affordability. There are indications from the study that the various arguments that respondents gave to justify tax evasion include government corruption, unfair treatment of citizens, tax affordability and unfavourable tax system. This shows that the responsiveness of government in terms of accountability, human right treatment and optimal tax rate play a significant role in the payment of taxes. The Government and other policymakers should find the results of this study useful in discouraging tax evasion and in developing tax policies aimed at minimizing tax evasion

An empirical study of the relationship between culture and personal income tax evasion in Nigeria

Tax evasion is a phenomenon present in all societies using taxes to finance government expenditures. There is a huge body of literature on the estimate of its extent. This study examines the relationship between culture (represented by legal enforcement, trust in government and religiosity) and personal income tax evasion in Nigeria. The study uses the chi square statistics and ordinary least squares regression to estimate the relationship between tax evasion and the independent variables namely legal enforcement trust in government and religiosity. Four hypotheses were tested. It was found that legal enforcement and trust in government have positive impact on personal income tax evasion in Nigeria. However, the study could not establish a significant relationship between tax evasion and the religious variables. Government policymakers should find the results of this study useful in assessing the likelihood of tax evasion from legal, political and religious perspectives, and in developing tax reform policies aimed at minimizing tax evasion. © EuroJournals, Inc. 2010

Intellectual capital and business performance: Evidence from Nigeria

The impact of intellectual capital (IC) on the general performance of the organisation has become a very important issue now than ever, this is due to the level of globalisation of whose outcomes are privatization and deregulation of markets, aggressive competition and the ever-rising expectations of customers. As a result of this, there is need for organisations to be at their best in order to be relevant in the environment. This paper focuses on developing economies and on Nigeria specifically. Using a sample of thirty-two audited financial statements of quoted companies in Nigeria, the paper examines the impact of IC components on business performance measured with Return on Equity (ROE) and Return on Assets (ROA). The results show that intellectual capital has a positive and significant relationship with the performance of business organizations in Nigeria. These results reinforce the accumulating body of empirical support for the positive impact of Intellectual capital on business performance. Based on the findings, the study recommends that corporate entities in Nigeria should invest in Human, Structural and Customer Capital in order to increase their performance

Constraints on the applicability performance management systems framework

As part of the New Public Management reforms in public-sector, private-sector style of management such as performance management systems (PMS) were adopted to ensure efficiency and accountability in the public sector of developed and developing nations. This study first explains the introduction of performance management and the level of its application in the Nigerian public sector. After that, this study attempts to identify the constraining factors (political and socio-cultural) on successful the application of PMS in Nigeria. Utilizing information obtained from interviews of management staff and employees of a state-owned hospital, it is argued that application of PMS should be cognizant of political and socio-cultural contextual characteristics of developing countries

An Assessment of Audit Approach and Audit Quality in Nigeria

The paper addresses the contemporary issue of quest for improved public confidence in financial reporting in Nigeria and the understanding of issues surrounding the way and manner that Nigerian auditors’ carry out their work. Therefore, the aim of this study is to assess the audit approach in the light of audit quality and the assurances that the financial statement provide. In spite of the number of changes that have taken place in the audit profession during the past twenty years which have changed the way external auditors operate and manage their activities in proving the statutory attest function on the financial statements, there is paucity of research focused on the way auditors’ carry out their attest function in the midst of dwindling investors’ confidence in Nigeria. Using a survey design, the questions that were raised in the study were answered using descriptive and inferential statistics. F-statistics was used in providing answers to the propositions raised in the study. Findings from the study show that respondents believe that auditors’ requirement to comply with ethical standards is a crucial factor in sustaining investors’ confidence. There is also evidence that the size, complexity and clients’ business risk are crucial factors in choice of audit approach in Nigeria. While significant differences were found in respondents’ perception of audit quality been a function of audit approach, it was otherwise on the effect of traditional audit impact on audit quality. The study suggests that there is the need for the profession to gear its effort towards adherence to ethics of the profession in Nigeria, ensure adherence and enforcement of high ethical standard. Audit approach should be based on size, complexity and clients’ business risk in the effort towards restoring the confidence of users of financial statements in Nigeria