ABSTRACT
The
study is aimed at Evaluating the Impact of Corporate Governance on the Nigerian
Banking Sector.
The
two major objectives of the study were to evaluate the principles of corporate
governance and to identify the challenges of corporate governance on the Nigerian
banking sector.
Primary
and secondary sources of data were used to obtain information for the study. The questionnaire was designed in five point
Likert scale format, in line with the objectives set out to achieve the study.
In
calculating the sample size, the researcher applied the statistical formula for
selecting from a finite population as formulated by Yamane. The Chi-square (X2) statistical test method was used to
test the hypotheses.
Findings
indicate that the principles of corporate governance include role and
responsibilities of the board, disclosure and transparency, rights and
equitable treatment of shareholders and the challenges of corporate governance
on the Nigerian banking sector includes technical incompetence of board and management,
increased levels of risks, and inadequate management capacity.
Based
on the findings, the study recommends that the central bank of Nigeria should
put more efforts to establish or promulgate regulations which will enforce
compliance to the principles of corporate governance by boards of the Nigerian
banks and that efforts should be made to educate the Nigerian public especially
the shareholders of banks on the place and need for corporate governance so
that they can insist on it when they go for annual general meetings (AGM).
TABLE
OF CONTENTS
Title
Page —- —– —— —— —— —— —— ii
Approval
Page—- —– —— —— —— —— —— iii
Certification
Page– —– —— —— —— —— —— iv
Dedication—- —– —— —— —— —— —— v
Acknowledgments——– —— —— —— ——- —– vi
Abstract
—- —– —— —— —— —— —— —- vii
Table
of Contents—- —– —— —— —— —— viii
List
of Illustrations——– —– —— —— ——- —— ix
List
of Tables————– —– —— ——- —— ——
x
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study———— —— —— 1
1.2 Statement of the Problem—- —— —— —— 2
1.3 Objectives of the Study———— —— —— —— 3
1.4 Research Questions—— —— —— —— —— 3
1.5 Research Hypotheses—— —— —— —— —— 3
1.6 Scope of the Study—— —— —— —— —— 4
1.7 Limitation of the Study—— —— —— —— 5
1.8 Significance of the Study—— —— —— —— 5
1.9 Definition of Terms—— —— —— —— —— 5
References
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Corporate Governance Generally Defined—— —— 7
2.2 Principles of Corporate
Governance—————— 8
2.3 Pillars of Corporate
Governance———————– 10
2.4 Parties to Corporate
Governance——————— 10
2.5 Essence of Good Corporate Governance
————– 10
2.6 Extent of Corporate Governance Practices in
Nigerian Organizations ——————————- 11
- Duties/Responsibilities of Directors to
improve
Corporate
Governance———————————– 11
- Role of Good Corporate Governance on
Nigerian Banking
Sector——————————— 12
- Challenges of Corporate Governance in
Nigeria—————————————————– 13
2.10 Challenges of Corporate Governance for
Banks Post
Consolidation——————————- 15
2.11 Systemic Problems of Corporate
Governance——— 17
2.12 Prospects of Corporate Governance
On
Nigerian Banking Sector—————————— 18
- Corporate Governance Mechanisms and Controls—– 18
- The Regulatory Institutions for Nigerian Banks——- 20
- Need for a New Code of Corporate Governance——– 21
References
CHAPTER THREE: RESEARCH
METHODOLOGY
- Introduction——————————————- 24
- Sources of Data——————————————- 24
- Area of the Study—————————————– 24
- Population of the Study——————————— 24
- Sample size Determination—————————– 25
- Instrument for Data Collection———————— 27
- Method of Data Analysis———————————- 27
- Validity of the Instrument ——————————– 28
- Reliability of the Instrument ———————————- 28
References
CHAPTER FOUR: PRESENTATION
AND ANALYSIS OF DATA
- Introduction—————————————– 30
- Data Presentation and Analysis——————- 30
- Testing of Hypotheses—————————— 34
CHAPTER
FIVE: SUMMARY OF FINDINGS, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary
of Findings ——————————– 43
5.2 Conclusion———————————————
44
5.3 Recommendations————————————- 44
BIBLIOGRAPHY
APPENDIX
IST
OF ILLUSTRATIONS
Pages
- Questionnaire
returned and not returned——————- 31
LIST OF TABLES
Pages
3.4.1 Target Population for the
Study———————————— 26
3.5.1 Category of
Staff—————————————————–
28
4.2.1 Sex Distribution of the
Respondents—————————— 31
4.2.2 Age Distribution of the
Respondents—————————— 32
4.2.3 Working Experience Distribution of the
Respondents———– 32
4.2.4 Responses on the Principles of Corporate
Governance——— 33
4.2.5 Responses on the Challenges of Corporate
Governance on
Nigerian Banking
Sector——————————————— 34
- Responses
on the Prospects of Corporate Governance on
Nigerian Banking
Sector———————————————– 34
- Responses
on the Extent to which banks operate by Corporate
Governance—————————————————————35
4.3.1 First Hypothesis Testing: Calculation of
Chi-Square values for 1st
hypothesis————————————————————-
36
- Second
Hypothesis Testing: Calculation of Chi-Square values for
2nd
hypothesis———————————————————– 38
- Third
Hypothesis Testing: Calculation of Chi-Square values for
3rd hypothesis———————————————————
40
- Fourth
Hypothesis Testing: Calculation of Chi-Square values for
4th
hypothesis————————————————————-42
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Corporate
governance is the set of processes, customs, policies, laws, and institutions
affecting the way a corporation (or company) is directed, administered or
controlled. Corporate governance also
includes the relationships among the many stakeholders involved and the goals
for which the corporation is governed.
The principal stakeholders are the shareholders, management, and the
board of directors. Other stakeholders
include employees, customers, creditors, suppliers, regulators, and the community
at large (Wikipedia, 2010:1).
Corporate
governance is a multi-faceted subject.
An important theme of corporate governance is to ensure the
accountability of certain individuals in an organization through mechanisms
that try to reduce or eliminate the principal-agent problem (Wikipedia,
2010:1).
It is
incontrovertible that corporate governance is one of the most critical issues
in the business world today. There was a
time when this topic would not have elicited much attention. But, with episodic failures of many
corporations, corporate governance has taken a central stage in business
discuss and any intellectual gathering on business management (Oladimeji,
2007:1).
Corporate
governance is also a system of structuring, operating and controlling a
company, be it bank or non-bank, with a view towards attaining long term
strategic goals to maximize shareholders wealth and satisfy other stakeholders,
employees, depositors, suppliers, other customers, and other stakeholders (Phillips,
2007:7).
Corporate
governance is concerned with improved stakeholder performance viewed from this
perspective, corporate governance is all about accountability, boards,
disclosure, investor involvement and related issues. Research has shown that firms with stronger
shareholder rights had higher firm value, higher profits, higher sales growth,
lower capital expenditure and fewer corporate acquisition (Oladimeji, 2007:2).
Corporate
governance is important for the survival of companies and indeed of national
economies in the increasingly global economy. For transition economies, such as
Nigeria’s which are faced with the double challenge of restructuring for
greater efficiency and creating foreign investment-friendly environment, good
corporate governance is crucial for success (Anyaoku, 2010:1).
The day-to-day
operations of business have raised the need to install an appropriate frame
work for ensuring transparency and accountability in the management of the
business ventures. Thus, the research
topic, “Evaluating the Impact of Corporate Governance on Nigerian Banking
Sector”.
- STATEMENT OF
THE PROBLEM
EVALUATING THE IMPACT OF CORPORATE GOVERNANCE ON THE NIGERIAN BANKING SECTOR. (A CASE STUDY OF THREE SELECTED BANKS IN LAGOS STATE)
