CORPORATE GOVERNANCE AND INNOVATION PERFORMANCE OF MANUFACTURING FIRMS IN NIGERIA
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Keywords:
Good Governance, Organizational Performance, Manufacturing FirmsAbstract
Despite extensive discussions on regulatory agency on the relationship between corporate
governance and organisational performance, it is not new that most extant literature and empirical
investigations do not provide detailed explanation on relationship between corporate governance and firm
innovation performance. Although, some empirical studies revealed that there is negative relationship
between the two variables. Thus, this study examined the extent to which corporate governance and
organisational performance. The study sampled listed manufacturing companies in Nigeria stock
exchange. The source of data was obtained from extracted data on activities of the selected firm period
from 2008 to 2017. The method of data analyses for the study are Hausman test, cross sectional panel
multiple regression, fixed effect result, random effect, pool effect. These methods are employed to
examine the extent of relationship and interaction impact on the selected variables. Descriptive statistics
and correlation matrix was used to pre-test the data in order to determine whether they are normally
distributed. Thus, the study revealed that positive and significant relationship between board size, board
independence and audit committee with firm financial performance. The study further indicated that
ownership structure has negative and insignificant relationship with firm financial performance. The
study asserted that the dimensions selected for measuring corporate governance mechanism on firm
financial performance was adequately observed. The director ownership is quite low at 4% and has an
inverse relationship with the performance measures. The average board size is found to be 9 which is in
concordance with the Securities and Exchange Commission Code of Corporate Code of Corporate
governance. The audit committee is on the average 49% independent which results in an impact on
performance based on return on equity and profit margin. The study recommended that member on
corporate governance in different companies should carry constantly carry out an audit of compliance on
corporate governance as its affect firm financial performance.
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