Corporate governance structure and firm performance in developing economies: evidence from Nigeria

Purpose - The purpose of this paper is to examine the link between corporate governance structure and firm performance in Nigeria. Design/methodology/approach - The present study uses the regression model to analyze publicly available data for a sample of 107 firms quoted in the Nigerian Stock Exchange for the fiscal years 1998 to 2002. Findings - The empirical investigations showed that ownership concentration has a positive impact on performance. Although the results revealed no evidence to support the impact of board composition on performance, there is significant evidence to support the fact that CEO duality adversely impact firm performance. The result also suggests firm size and leverage to impact on firm performance. A new variable, identified as more than one family member on the board, is found to have an adverse effect on firm performance. Research limitations/implications - The study relied much on publicly available data for a sample of 107 listed firms in Nigeria for the fiscal years 1998 to 2002. Thus, effort should be made to look at this study in a more elaborate viewpoint and across borders. Practical implications - Good corporate governance standards are imperative to every organization and should be encouraged for the interest of the investors and other stakeholders. Originality/value - Interestingly, from a developing country perspective, especially in sub-Saharan Africa, the paper is the first of its kind and offers evidence on the impact of corporate governance structure on firm performance. The paper provides useful information that is of great value to policy makers, academics and other stakeholders.