Corporate Governance Principles Application and the Financial Performance of Deposit Money Banks in Nigeria: An Impact Assessment

Corporate Governance entails designing systems, procedures, structures and taking transparent decisions on ways of improving firms’ value to promote accountability. Poor application of Corporate Governance principles was identified as a major possible factor in firms’ failure globally. Despite the focus on the subject matter, little attention is paid on Corporate Governance application and the financial performance of Deposit Money Banks in Nigeria. This motivated the paper to assess the impact of Corporate Governance application on the financial performance of some Deposit Money Banks in Nigeria. A hypothesis was formulated and tested in line with the main objective of the study. The study used both descriptive and historical research methods, while the sample size was determined using judgmental sampling technique. Method used in data collection was secondary source. The t-test analysis technique was adopted to estimate the relationship between the application of Corporate Governance principles and financial performance. Findings proved that there is no significant relationship between board structure and banks’ financial performance. The paper suggests that other Corporate Governance indices must also be considered in measuring the financial performance of Deposit Money Banks in Nigeria for value improvement and accountability. Key Words: board structure, corporate governance, deposit money banks, financial performance, principle

Effect of firm characteristics on profitability of listed consumer goods companies in Nigeria

The aim of this research is to examine the effect of firm characteristics on profitability of listed consumer goods companies in Nigeria. Profitability is the dependent variable proxied by Return on sales (ROS), while firm characteristics is the independent variable proxied by firm age, firm size, sales growth, liquidity and leverage. The population of the study consists of twenty two (22) listed consumer goods companies as at 31st December, 2016. Eighteen of the listed consumer goods companies are selected to form the sample of the study for the period of six years (2011-2016). The study employed multiple regressions as tool for analysis. A hypothesis was formulated and tested for the study; which states that: Firm characteristics have no significant effect on profitability of listed consumer goods companies in Nigeria. Secondary data obtained from the financial statements of the companies were analyzed. Panel data techniques (fixed and random effects models) were utilized to examine the effect of firm characteristics on profitability and Hausman specification test confirmed that random effects model was more appropriate for the study. The results show that firm size, sales growth and leverage have significant effects on profitability. In contrast, firm age and liquidity are not significantly affecting profitability of listed consumer goods companies in Nigeria. The study therefore recommended that, consumer goods companies in Nigeria should conduct careful evaluation and take into consideration the firm characteristics (firm size, sales growth, and leverage) that affect the profits of the company before making major business decisions as this will help in improving their profitability.peer-reviewe

Audit Committee: Size, Independence and Environmental Disclosure of Non-Finance Service Companies in Nigeria: The Moderating Role of Audit Committee Share Ownership

This study examined the effect of audit committee size and audit committee independence on environmental disclosure of non-finance service companies listed in Nigeria. Extant literature on this topic is more in developed countries where legal regulatory framework exists. There are limited empirical studies in developing countries like Nigeria that examine the effect audit committee size and independence on environmental disclosure, measured with Global Reporting Initiative checklist and their results have wide variant. Secondary data were collected from the annual reports of the sampled companies. 58 companies out of the population of 89 listed non-financial companies in Nigeria were sampled out. Descriptive statistics and multiple regression were employed for analysis. The study finds that the direct effect of audit committee size and audit committee independence on environmental disclosure is insignificant with probability values of 0.154 and 0.107, respectively. However, when moderated by audit committee share ownership, the effect of audit committee size on environmental disclosure of the sampled companies become significant with Probability value of 0.049. This finding suggests that audit committee size has positive and significant effect on environmental disclosure of non-finance companies listed in Nigeria where members of audit committee has shares in the company.  Based on the findings, the study recommends that regulatory authorities should encourage companies to select members of audit committee with share ownership in the companies because it influences the effect of AC size on environmental disclosure. Keywords: Environmental disclosure, audit committee size, audit committee independence, audit committee share ownership, non-financial service companies, Nigeria DOI: 10.7176/RJFA/12-8-03 Publication date: April 30th 202

Control Environment and Risk Management of Listed Financial Services Firms in Nigeria

A considerable number of studies have examined the effect of control environment on risk management at corporate level. However, these studies failed to disaggregate control environment into its elements and therefore failed to answer the question of which of the elements of control environment has the most impact. It is in view of this that this study examines the effect of control environment on risk management of listed financial services firms in Nigeria. Primary data was collected using the 5-point Likert scale structured questionnaire adopted from Ernst and Young (2003), the Committee of Sponsoring Organizations of the Treadway Commission (2013) and Simon and Fishbacher (2009) frameworks. 30 copies of the questionnaire were administered on each of the 35 sampled listed financial services firms. The data were diagnosed by means of normality test, multicollinearity test, heteroskedasticity test and reliability test and analyzed using descriptive (mean, standard deviation, minimum and maximum) and multiple regression analysis. Results show that all the 6 measures of control environment have significant effects on risk management among listed finance services firms in Nigeria. The study, therefore, concludes that integrity, values, ethics and behaviours of managers, management control and consciousness, commitment, board and audit committee participation in corporate governance and oversight and organizational structure, assignment of authority and human resource policy and practices are important considerations in risk management. The study recommends among others that the board and audit committee of the firms to take a more proactive participation in corporate governance and oversight. Managers must acknowledge their role in shaping organizational ethics and values and seize this opportunity to create a climate that can strengthen the relationships and reputations on which their companies’ success depends. Sound decision-making is a crucial skill for managers.  From overseeing a team to leading a critical meeting, being an effective manager requires knowing how to analyze complex business problems and implement a plan for moving forward.  Finally, management should position their organizations within their markets to exploit organizational competencies and strengths. Keywords: Control Environment, Risk Management, Financial services Firms, Internal Control, and Management Control. DOI: 10.7176/RJFA/12-6-05 Publication date:March 31st 202

Market Risk and Stock Return of Listed Financial Service Firms in Nigeria

The trading financial instruments in the capital market by Financial Service Firms (FSF) have generated return arising from changes in the prices of stock which exposed the firms to market risk. An effective market risk decision remains significant to determining stock return level realized from the volume and value of stock traded. This study examines the effect of market risk on stock return of listed FSF in Nigeria. The population of this study consists of fifty-six (56) financial service firms listed in the Nigerian Stock Exchange Market. In arriving at the sample size of twenty-nine (29) firms the purposive sampling technique and filtering criteria were employed. Data were sourced secondarily from the audited annual report of financial service firms, Nigeria Stock Exchange fact book, and other relevant financial service firms’ websites for period of twelve (12) years (2007-2018). Panel multiple regression technique of data analysis was applied using the ordinary least square estimator. The findings of the study revealed that book to market ratio as a proxy of market risk was insignificantly negative on stock return during the period under review. Net interest margin as a proxy of market risk revealed a significant positive effect on stock return during the period of review. Also, the study revealed that control variables of firm size, leverage had significant positive effects on stock return, though; the effect of monetary policy rate was positive but insignificant on stock return. The study concluded that a higher book to market ratio would reduce stock return and to a larger extent the reduction in stock return may not be affected significantly. It also concluded that a higher net interest margin would result to a higher stock return and vice versa. The study recommended that decision-makers and portfolio managers of financial service firms should employ appropriate risk strategies through derivatives, forwards, futures, swaps, options that can mitigate market risk in order to optimize return. Keywords: Financial Services Firms, Stock Returns, Market Risk, Firms Specific Risk factors, Nigerian Stock exchange. DOI: 10.7176/EJBM/13-8-10 Publication date: April 30th 202

Board Independence, Expertise, Foreign Board Member and Financial Performance of Listed Insurance Firms in Nigeria

Most studies on board independence, board expertise, foreign board members and financial performance in Nigeria and other parts of the world showed different results with some showing positive, negative and mixed results. This study examined the effect of board independence, expertise and foreign board member on the financial performance of listed insurance firms in Nigeria. The population of the study comprises 26 listed insurance firms in Nigerian Stock Exchange and 17were selected as sample the size using random sampling technique. The regression analysis revealed that board expertise and foreign members have statistical significant effect on the financial performance measured by return on asset (ROA). Board independence has a significant effect on ROA but do not have significant effect on return on equity ROE. The study  therefore, recommend that regulators must ensure that competent independent board members are well represented in the board of directors, and insurance companies should adhere strictly to the corporate governance code of conduct as it affects  board expertise  and foreign  board members so  to improve the quality of financial performance

Investment on Automated Teller Machines and Banks’ Customer Satisfaction in Nigeria

The issue associated with off banking hall and off hour transactions is currently taking a center stage in the Nigerian banking sector which influenced banks to provide Automated Teller Machines in order to dispense cash, make financial enquiries as well as funds transfers for the purpose of rendering efficient banking services to customers. But recently in Nigeria, deposits were also made through them in some banks. In Nigeria, it performances was bedeviled by some factors which necessitated this paper to focus on the relationship between investment on Automated Teller Machines and customers satisfaction using selected Banks in Nigeria. The study made use of secondary data obtained from annual reports and financial statement of sampled banks quoted in the Nigerian Stock Exchange for the period 2001-2010. Data were analyzed through the Ordinary Least Square regression model using the Statistical Package for Social Sciences. Finding revealed that investment on Automated Teller Machines, related software and hardware had a significant impact on banks’ customer satisfaction as measured by Total Deposit. The study recommends that banks should increase their investment on Automated Teller Machines, focus more on data security aspect and service diversification in order to build a strong and reliable relationship with customers for increased profitability Keywords: Automated Teller Machines, Banks, Customer Satisfaction, Hardware, Software, Total Deposits, Profitabilit

Effect of firm attributes on return on asset of listed manufacturing companies in Nigeria

The profitability of manufacturing companies does not only play the role of improving the market value of that specific company but also leads to the overall growth of the whole sector which translate to improvement on profit level that could be attributable to characteristics possessed by firms. It is on this the study examines the effect of firm attributes on the return on assets of listed companies in Nigeria for a period of five years. The population and sample size of this study comprises of all the 41 listed manufacturing companies in the Nigerian Stock Exchange as at 31 December, 2016. The result of random effect regression provides evidence that all firm attributes apart from operating expenses and firm size had a negative and significant effect on return on asset. Based on this result, the study recommends that listed manufacturing firms should reduce firm size and operating expenses so as to increase the return on assets of their firms and short term cash should not be channeled to fund capital asset.peer-reviewe

Effect of Audit Committee Tenure on Financial Reporting Quality of Listed Deposit Money Banks in Nigeria

This study examines the effect of audit committee tenure on financial reporting quality of listed deposit money banks in Nigeria. The study uses panel data obtained from the Nigerian Stock Exchange factbooks and the financial statements of 14 listed deposit money banks over a period of 10 years (2007-2016). The study uses cross sectional and time series research design. Financial reporting quality was measured using the modified Jones (1991) model and changes in working capital model, while audit committee tenure was measured as the mean tenure of audit committee members. The data was analyzed using descriptive (mean, standard deviation, minimum and maximum) and inferential statistics (correlation and regression analysis). The study reveals that audit committee tenure has a negative and insignificant effect on financial reporting quality under the two models. The implication of these results is that the tenure of audit committee members is not important when considering the financial reporting quality of deposit money banks in Nigeria. The study therefore concludes that the effect of audit committee tenure on financial reporting quality of deposit money banks in Nigeria is negative and insignificant. Based on this conclusion, the study recommends that further research should be conducted on other audit committee attributes in order to see which of the attributes may have significant effect on financial reporting quality

EFFECT OF CORPORATE GOVERNANCE CODES ON RETURN ON EQUITY OF NIGERIAN DEPOSIT MONEY BANKS

The central bank of Nigeria in a bid to curb the turbulence that had troubled the Nigeria banking industry for decades introduced the Codes of Corporate Governance in order to stabilize the industry and enhance the banks performances. It is against this backdrop that this study examined the effect of corporate governance codes on the return on equity of the Nigeria deposit money banks. The study used secondary data from a sample of ten banks covering eight years and employed multivariate regression techniques, ordinary least squares in the study. The study finds that corporate governance codes have an insignificant positive effect on return on equity of the selected banks. Consequently, the study recommends that corporate governance codes should be further reviewed so that they can significantly improve on profitability of deposit money banks in Nigeria