CORPORATE GOVERNANCE AND FIRM VALUE

ABSTRACT

Globally, managers are always under intense pressure to meet stakeholders‘ desired firm value expectations, creating uncertainties and apprehensiveness when making corporate strategic plans. Prior studies have laid claims that best corporate governance practices and corporate financial reporting quality are important in achieving a successful and sustainable value for banks.. The degree of corporate and market procedures, lack transparency, distortions and poor corporate practices which results in corporate failures and abysmal corporate financial performance negatively influence corporate objectives. Hence, this study investigated the effects of corporate governance mechanisms on the value of listed financial institutions in Nigeria from 2017 to 2022. The specific objectives include investigating the relationship between board size and Tobin q; evaluating the relationship between board independence and Tobin q; determining the relationship between Audit committe and Tobin q . The study population consisted of listed financial institutions in the Nigerian Exchange Group. The secondary data for the study was from the published financial statements of sampled banks for the period after the validity and reliability test of data. The data obtained were tested using univariate, bivariate and multivariate analysis. The results from the multiple regression results disclosed that board independence, the board size and Audit committe positively and significantly influence the value of deposit money banks in Nigeria. The study concluded that corporate governance attributes positively and significantly affect the value of listed financial institutions in Nigeria. The study made several recommendations amongst others that board sizes should be enhanced as this allows for the appropriate combination of directors. A large board increases the chance of directors having appropriate knowledge, skill and networks. The knowledge, skill and networks of directors may increase the financial performance of an organisation.. Hence, the implication of this study provides that the implementation of corporate governance characteristics enhances the value of firms in deposit money banks in Nigeria.