Impact of Corporate Governance on Financial Performance of Consumers Goods Firms in Nigeria

Abstract

The main objective of this study is to determine the impact of corporate governance on the financial performance of consumer’s goods firms in Nigeria over a period of five (5) years (2015 – 2019). This work employed Board Size, Board Independence, Board Diversity and Board Meeting to represent mechanism in determining their impact on performance of the Return on Asset as proxies dependent variable. The ex-post facto research design was used for this study; the secondary data obtained from the annual financial statements (Comprehensive income statement and Statement of financial position) of the selected consumers goods firms quoted on the Nigerian Stock Exchange. Descriptive statistics, Pearson correlation and Panel regression analysis in the form of generalized moment method is the main technique used for data analysis . The results showed that Board size has positive and insignificant effect on Return on Assets of listed consumer’s goods firms in Nigeria, Board independence has negative and insignificant effect on Return on Assets of listed consumer’s goods firms in Nigeria, Board diversity (women directors) has positive and significant impact on Return on Assets of listed consumer’s goods firms in Nigeria and Board meeting has positive and insignificant impact on the Return on Assets of listed consumer’s goods firms in Nigeria at 1% level of significant. Based on the above findings, we recommended the size of the board and independent directors should be well structured so as to help increased and widen the diverse skills and expertise and hence increased the financial performance of the firms and frequency of interaction among board members should be increased. As this will enable the board to discuss on operations of the company and how the health and wealth of the company will be improved.