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ABSTRACT
In view of the above analysis it can be concluded that, Corporate Governance is necessary to the proper functioning of banks and that Corporate Governance can only prevent bank distress only if it is well implemented. That is, to prevent bank distress through adequate corporate governance is not just about the government setting rules and regulations but actually ensuring that the laid down rules and regulations are being strictly adhered to in every operation of the bank.
This research study considered the impact of corporate governance on the performance of banks in Nigeria. It was observed that both advanced and developing economies are not immune against banking sector failure. Though banking failure could be attributed to low economic development in the developing economies. The research study also shows that weak governance practices and agency problems contributed to the failure of banks. Compliance with governance requirements reduces the rate of failure. However, it was observed that compliance to the codes of governance was made mandatory in Nigeria but sanctions for non compliance were not implemented. This renders the principles and codes of governance less attractive and effective. Inspite of the increment in the Nigerian banks capital base to N25 billion, the selected ratios examined does not guarantee confidence to the users of the financial statement. The analysis of the selected ratios does not show favourableresult on the average and in some instances, does not agree with the industrial standards. Conclusively, continuous review of the governance codes became imperative due to the complexity and constant changing environment of the banking sector in Nigeria. The International codes of corporate governance should be properly adopted to meet the need of Nigerian governance environment.
Furthermore, the study conclude that a negative relationship exist between bank performance,board size and proportion of non executive directors. That is, a reasonably strong correlationexists between poor performance and subsequent increase in board size and independence.While a percentage increase in return on equity can be explained by directors‟ equity interest and the governance disclosure level.
