TABLE OF CONTENTS
Declaration ii
Approval
page iii
Dedication
iv
Acknowledgements v
List of Tables viii
Abstract
ix
CHAPTER
ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 4
1.4 Research Questions 4
1.5 Hypotheses 4
1.6 Significance of the Study 5
1.7 Scope of the Study 5
1.8 Limitations of the Study 5
1.9 Definition of Terms 6
1.10 Profile of Organization sunders Study 6
References
CHAPTER
TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 10
2.2 The Purpose and Objectives of Corporate Governance 12
2.3 Features of Good Corporate Governance 14
2.4 Principles of Good Corporate Governance 15
2.5 Functions of Corporate Governance/Mission 16
2.6 The Stakeholders in Corporate Governance 18
2.7 Causes of Corporate Governance Failure 22
2.8 Problems of Corporate Governance 24
2.9 Corporate Governance Controls 25
2.10 Benefits of Good Corporate Governance 26
2.11 Corporate
Governance and the Current Crisis in the
Nigerian Banking Sector 26
2.12 Corporate Governance Practices in Emerging Economies 28
2.13 Corporate Governance, Capital Markets and Firm Performance 30
2.14 Corporate Governance Role Model Structure
on Performance of
Manufacturing
Firms 35
2.15 Actors in the Corporate Governance System 37
2.16 Stakeholders through Effective Corporate Communication 39
2.17 Board Structure of Corporate Governance 42
2.18 The
Role of Internal Corporate Governance Mechanisms in
Organisational Performance 49
2.19 Corporate Financial Policy 53
2.20 Theoretical Review 55
2.21 Empirical Review 61
2.22 Summary of Review of Related Literature 65
References
CHAPTER
THREE: METHODOLOGY
3.1 Introduction 75
3.2
Area of the Study 75
3.3
Sources of Data 75
3.4 Population of the Study 75
3.5 Description of the Research Instruments 77
3.6 Method of Data Analysis 77
3.7 Validity of the Research Instrument 78
3.8 Reliability of the Research Instrument 78
References
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data presentation and Analysis 81
4.2 Test of Hypotheses 86
CHAPTER
FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 91
5.2 Conclusion 91
5.3 Recommendations 91
5.4 Suggested Areas of Further Studies 91
Bibliography
Appendix
LIST OF TABLES
Table 3.1: Population and Sample Size Determination 75
Table 4.1: Questionnaire Distribution 81
Table 4.2: Sex Distribution of the Respondents 81
Table 4.3:Age Distribution of the Respondents 82
Table 4.4: Marital Status of the Respondents 82
Table 4.5: Educational Qualification of the Respondents 83
Table 4.6: Category of Staff 83
Table 4.7: Working Experience 84
Table 4.8: Benefits Derived from Corporate Governance Practice? 84
Table 4.9: Challenges Encountered in Corporate Governance Practice? 85
Table
4.10: Nature of the Relationship between Corporate Governance
and
Organizational Effectiveness? 85
Table
4.11: Contingency Table for Testing Hypothesis (1) Referred Table 4.6 86
Table 4.12: Chi-Square Tests from the Frequency Cross Tabulation 86
Table
4.13: Contingency Table Referred Table 4.7 for Hypothesis Testing (2) 87
Table 4.14: Chi-Square
Tests from the Frequency Cross Tabulation 88
Table
4.15: Contingency Table Referred Table 4.8 for Hypothesis Testing (3) 89
Table 4.16 Descriptive Statistics 89
Table 4.17 Correlations 89
ABSRACT
The study sought to identify the
benefits derived from corporate governance practice, assess the challenges
encountered in corporate governance practice, and determine the nature of the
relationship between corporate governance and organizational effectiveness. The
study has a population size of 613, out
of which a sample size of 242 was realized using Taro Yamane’s Formula at 5%
error tolerance and 95% level of confidence. The Instruments used for data
collection were questionnaire and interview. A total of 242 copies of the
questionnaire were distributed while 191(79%) copies were returned and 51(21%)
were not returned. The Survey research design was adopted for the study. Three
hypotheses were tested using Pearson product moment correlation coefficient and
chi- square statistical tools. The findings indicated that good corporate
governance practice improves corporate performance, improves access to
international capital markets and attracts quality foreign investments. Supply
of accounting information, demand for information and monitoring cost are
challenges encountered in corporate governance practice. There is a positive
relationship between corporate governance practice and organizational
effectiveness. The study recommended that organisations should be providing
shareholders with periodic reports on changes affecting the shareholders in the
company, and should hold regular meetings with members of the Board of
Directors to ensure that their roles should be done.
CHAPTER
ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Corporate
governance is a system by which companies (business organizations) are directed
and controlled. Dignam and Lowry (2006:4) define corporate governance as a set
of processes, customs, policies, laws and institutions affecting the way a
corporation (organization) is directed, administered or controlled. They went
further to state that corporate governance is meant to ensure accountability of
certain individual in an organization through mechanism that try to reduce or
eliminate the problem(s) that exist(s) between the principal and the agent.
Singh
(2006:73) states that the broad concept of corporate governance is that it is a
continuous process of the company which relentlessly pursues through full regulatory
compliance, transparency, efficient operational practices, strong internal
control and risk management systems, and operating with fairness and integrity
to enhance the interest of stakeholders.
O’Donovan
(2006:2) opines that corporate governance as an internal control system
encompassing policies, processes, and people which serves the needs of
shareholders and other stakeholders by directing and controlling management
activities with good business savvy, objectivity, accountability and integrity.
it is a system of structuring operating and controlling a company with a view
to achieve a long term strategic goal to satisfy shareholders, creditors,
employees, customers and suppliers and complying with the legal and regulatory
requirements, apart from meeting environmental and local community need (social
responsibility).
Ayida
(2004:82) stresses that corporate governance is a set of mechanism through
which outside investors are protected from expropriation by insiders (including
management, family interest and /or governments). He states that expropriation
of outsiders takes many forms: outright theft of assets, transfer pricing,
excessive executive compensation, entrenchment of in-depth management terms,
diversion of funds to unsuitable projects that benefit one group of insiders
etc.
The
recent spate of corporate failure in Nigeria especially the private/public
owned organizations, has brought to the fore the need to re-examine the issues
of corporate governance practices in Nigeria.
Kootnz
and Weihrich (2006:425) assert that since 2001, there has been renewed interest
in corporate governance in modern corporations due to high profile collapses of
a number of US (multinational) firms such as Enron Corporation, MCI Inc.,
formally known as Worldcom, Tyco, a conglomerate and others. All these
corporate failures have rekindled the need to ascertain what makes up corporate
governance and the attendant reasons for its failures.
Molokwu
(2003:2) states that corporate governance facilitates the achievement of
economic development, provides the tools for plugging loopholes, checking of pilfering and leakages
and encourages rationality and virtues which are highly needed in the Nigerian
economy.
Johnson
and Scholes (1999:19) opine that Corporate governance serving as a tool for
corporate profitability in organizations involves corporate planning and
control in competitive environment that strategically position them. In their
analysis, it was clearly expressed that competition among corporate
organizations about the present and future resources available in their
environment determines their good corporate governance (competence) as well as
achieving their profit objective.
In
other words, the ability of corporate organizations to effectively and
efficiently manage the complex factors of the environment (commercial,
economic, political, technological, cultural and social) is very important in
their profit making goals. In coping with competition, a review of
opportunities and threats as well as strengths and weakness available in an
industry is necessary so as to minimize costs and maximize profit (benefits).
It is paramount to note that corporate governance could be utilized in
achieving corporate or organizational goals when such an organization address
some internal management problems that could hinder her from attaining
competitive advantage over her colleagues in the industry. Some internal
resources to corporate organizations in good governance includes: location or
sitting of such organization, technology, favour, market, human resources and
skills (proficiency), responsibility to each of the stakeholders (government,
shareholders, creditors, customers, cultural influences etc)( Pool and Warner, 2000:681).
1.2 STATEMENT OF THE PROBLEM
CORPORATE GOVERNANCE AND IMPLICATION FOR ORGANIZATIONAL EFFECTIVENESS
