Corporate Governance and Financial Performance of Quoted Oil and Gas Companies in Nigeria
Keywords:
Financial, Quoted Oil, Gas
Abstract
This study examined corporate governance and financial performance of quoted oil and gas companies in Nigeria. The study used the published annual reports spanning the period 2008 to 2015. A sample of twelve (12) out of the fourteen (14) quoted companies in the oil and gas sector were used for this study. The Generalized Least Square (GLS) regression was employed to examine the relationship existing between the variables. The study found that Board size, board gender diversity and corporate governance practices have significant positive impact on financial performance. Board diligence and corporate governance reforms are positive but not significant while board political affiliation has significant negative relationship with financial performance of quoted oil and gas companies in Nigeria. In the light of the above findings, it is recommended that companies should ensure that boards are effective in discharging their roles in monitoring the activities of management and that attention should not be on frequency of board meetings because of its negative impact on financial performance.
References
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35. Salami, F. (2013). Corporate governance disclosure index and financial performance: A meta-analysis. The Academy of Management Journal, 42(6), 674-686.
36. Shleifer, A. and Vishny R.W (2017). A survey of corporate governance. Journal of Financial Economics, 52(2), 737-783.
37. Suuli, L. & Ki- Park, Y. (2013).Corporate governance and firm performance in Japan. International Journal for Business, 80(2), 585-612.
38. Thuraisingam, F. (2013). The relationship between corporate governance and company performance of financial service industry. America Economic Journal of Applied Economics, 1(8), 219-250.
39. Uche, C. (2014). Corporate governance in Nigerian financial industry. Chartered Institute of Bankers of Nigeria Journal, 2, 11-23
40. Uwuigbe, T. (2012). Corporate governance: effect on firm performance and economic growth. Academy of Management Review, 8(51), 92-104.
41. Vafeas, N. (1999). Board meeting frequency and firm performance. Journal of Financial Economics, 15(3), 122-128.
42. Wolfensohn, D. (2019). Corporate governance is about promoting corporate fairness, transparency and accountability. Financial Times, 21st June.
43. Xavier, M. et al (2015). The effect of corporate governance measured by board size, CEO duality, institutional ownership and board composition on financial performance of commercial banks in Rwanda. Quarterly Journal of Economics, 55(27), 443-476.
44. Zabri, G., Ahmad, L. and Wah, A. (2015). The relationship between corporate governance practices with firm performance. Journal of Financial and Quantitative Analysis, 31(3), 377-397.
45. Zubaidah, A.Z., Nurmala, K.M & Kamaruzaman, J. (2009). Board corporate performance and corporate performance in Malaysia. International Journal of Economic Finance, 70(31), 150- 164.
2. Agu, K. (2019). Corporate governance and the performance of manufacturing firms in Akwa Ibom State. Journal of Business 78(12), 181-217.
3. Ahmed, H. and Hamdan, O. (2015). Impact of corporate governance on firm performance in Bahrain Stock Exchange (BSE). The Business Lawyer, 48(1), 59-77.
4. Akinsulire, O. (2016). Financial management (9th ed.). Lagos: El-Toda Ventures.
5. Berle, A. & Means, G. (2012). The modern corporation and private property. New York: The Macmillian Company, Cadbury, (1992): Cadbury commission report UK.
6. Carter, D.A., Simkins, B.J & Simpson, W.G (2003). Corporate governance, board diversity, and firm value. The Financial Review, 38(7), 33-53.
7. Connell, V.O & Cramer, N. (2010).T he relationship between corporate performance and board characteristics in Ireland. European Management Journal, 28(11), 287-399.
8. Drucker, P. (1999). Management challenges for 21st century. New York: Harper Business.
9. Fama, E., & Jensen, M. (2012). Separation of ownership and control. Journal of Law and Economics, XXVI(12), 1-32.
10. Famoti, R., &Adeyeye, K. (2013). Board dynamics and corporate performance: Review of literature, and empirical challenges. International Journal of Accounting and Finance, 7(2), 56 – 69.
11. Farar, J. (2015). Corporate governance: Theories, principles and practice. In Okene et al (ed.) The regulation of corporate governance in Nigeria; Lessons from different policies and implementation process in Germany. Nigeria Journal of Business and Private Law, 1(1)
12. Fishman, R. (2000). Estimating the value of political connections. American Economic Review, 91(25), 1095 -1102.
13. Gompers, P., Ishii, J. & Metric, A. (2013).Corporate governance and prices. Quarterly Journal of Economics, 118(1), 107-155.
14. Gornick, J.C., & Meyers, M.K. (2013). Families that work: Policies for reconciling parenthood and employment, New York: Russell Sage Foundation.
15. Houston, G. (2012). Corporate political contributions and stock returns. Journal of Finance, 65(12), 621-634.
16. Ibrahim, B. and Abdul, S. (2011). The relationship of corporate governance mechanism and performance between family and non-family ownership of public listed firm in Malaysia from 1999 through 2005. Financial Management, 21(7), 905-92.
17. ICAN (2009). Financial reporting and ethics. Lagos, Nigeria: VI Publishers.
18. Ishaya, M. (2013). Board composition firms‟ financial performance. It used secondary data through regression. Securities Market Journal, 2006 Edition, 12(10), 9- 28.
19. Jensen, M. & Meckling, W. (2016). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
20. Jensen, M.C (1993). The modern industrial revolution, exit and the failure of internal control systems. The Journal of Finance, 48(3), 831-880.
21. Joe, M., & Lilian, C. (2011). Firm performance and corporate governance through ownership structure: Evidence from Bangladesh stock market. International Review of Business Research Papers, 12(6), 88-110.
22. Kahan, M. & Rock, E.B (2013). Corporate constitutionalism: Antitakeover charter provisions as pre-commitment. Faculty Scholarship, Paper 19. http://scholarship.law.upenn.edu/faculty_scholarship/19
23. Kashif, R. (2008). A comparison of corporate governance and firm performance in developing (Malaysia) and developed (Australian) financial market. Melbourne: Centre for Strategic Economic Studies.
24. Klapper, L.F & Love, I. (2013). Corporate governance, investor protection, and performance in emerging markets. Journal of Corporate Finance, 62(23), 195, 1-26.
25. Magdi, R. and Nadareh, R. (2012). Corporate governance: A framework for implementation. Britain World Group Journal, 20, 123-132.
26. Mensah, S. (2013). Corporate governance in Africa: The role of capital market regulation. Nairobi 2’ Pan African Consultation Forum on Corporate Governance.
27. Ning, Y., Davidson, W., & Wang, J. (2010). Does optimal corporate board size exist: An empirical analysis. Journal of Applied Finance, 20(31), 57-69.
28. Oba, V.C., & Fodio, M.I. (2013). Boards’ gender mix as a predictor of financial performance in Nigeria: an empirical study. International Journal of Economics and Finance, 5(2), 1916-9728.
29. OCED (1999). Principles of corporate governance. http://www.encycogov. com/.
30. Okene, K., Chinwo, C.A and Ikeh, F.C (2010). The regulation of corporate governance in Nigeria: lessons from recent policy and implementation process in Germany. Nigeria Journal of Business and Private Law, 1(1)
31. Olatunji, A. & Ojeka, K. (2011).Firm financial performance and mechanisms to control agency problems between managers and shareholders. Journal of Financial and Quantitative Analysis, 31(3), 377-397.
32. Osoweto, M. (2013). Corporate governance and firm financial performance of listed companies in South Africa. Journal of Corporate Finance, 14(3), 257-273.
33. Oyebode, A. (2009). The imperative of corporate governance in Nigeria.Retrieved from A. Nigeria Village Square Web sitehttp://www.nigeria villagesquare.com
34. Rouf, A. (2012). The financial performance and corporate governance disclosure: A study in the annual reports of listed companies of Bangladesh. Pakistan Journal of Commerce and Social Sciences, 6(1), 1-11.
35. Salami, F. (2013). Corporate governance disclosure index and financial performance: A meta-analysis. The Academy of Management Journal, 42(6), 674-686.
36. Shleifer, A. and Vishny R.W (2017). A survey of corporate governance. Journal of Financial Economics, 52(2), 737-783.
37. Suuli, L. & Ki- Park, Y. (2013).Corporate governance and firm performance in Japan. International Journal for Business, 80(2), 585-612.
38. Thuraisingam, F. (2013). The relationship between corporate governance and company performance of financial service industry. America Economic Journal of Applied Economics, 1(8), 219-250.
39. Uche, C. (2014). Corporate governance in Nigerian financial industry. Chartered Institute of Bankers of Nigeria Journal, 2, 11-23
40. Uwuigbe, T. (2012). Corporate governance: effect on firm performance and economic growth. Academy of Management Review, 8(51), 92-104.
41. Vafeas, N. (1999). Board meeting frequency and firm performance. Journal of Financial Economics, 15(3), 122-128.
42. Wolfensohn, D. (2019). Corporate governance is about promoting corporate fairness, transparency and accountability. Financial Times, 21st June.
43. Xavier, M. et al (2015). The effect of corporate governance measured by board size, CEO duality, institutional ownership and board composition on financial performance of commercial banks in Rwanda. Quarterly Journal of Economics, 55(27), 443-476.
44. Zabri, G., Ahmad, L. and Wah, A. (2015). The relationship between corporate governance practices with firm performance. Journal of Financial and Quantitative Analysis, 31(3), 377-397.
45. Zubaidah, A.Z., Nurmala, K.M & Kamaruzaman, J. (2009). Board corporate performance and corporate performance in Malaysia. International Journal of Economic Finance, 70(31), 150- 164.
Published
2021-08-12
How to Cite
Nsisuk H., A., & Nsima J., U. (2021). Corporate Governance and Financial Performance of Quoted Oil and Gas Companies in Nigeria. Central Asian Journal of Innovations on Tourism Management and Finance, 2(8), 1-13. https://doi.org/10.47494/cajitmf.v2i8.135
Section
Articles
Copyright (c) 2021 Akpanabia, Nsisuk H., Umoffong, Nsima J.
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