Effect of Corporate Governance on Financial Performance of Non-Governmental Organizations in Nigeria: Evidence from Pro-Health International

Abstract

The main objective of this study was to establish the effect of corporate governance on financial performance of NGOs in Nigeria with emphasis on Pro-Health International. Secondary data was obtained from Pro-Health International annual reports and accounts, and notes to the financial statements. The sample was focused on Pro-Health, an implementing partner of foreign donor funded project for the period 2011 to 2020. The dependent variable financial performance was proxy by grants and award value and the independent variable corporate governance was proxy with board diversity, frequency of meetings and evaluations. The results revealed that corporate governance had significant influence on financial performance of NGOs in Nigeria and tests for significance also showed that frequency of meetings influence was statistically significant (r=0.533). Embracing corporate governance practices therefore positively influence financial performance of NGOs in Nigeria. It is recommended that government should develop a code of conduct that outlines proper corporate governance measures for NGOs in Nigeria considering the voluntary nature of the members of the board. Also, the significant nature of meeting frequency requires that boards meet at least quarterly to ensure extensive program performance and financial review and feedback. It is also recommended that the organization establish an audit committee for effective monitoring of assurance services and financial performance.