The Moderating Roles of The Internal and External Corporate Governance Mechanisms on The Performance of Non-Financial Listed Firms in Nigeria

Iwora Godfrey Agara and Lesley Stainbank

Article history:
Received: 10 July, 2022
Accepted: 10 May, 2023


This study extends the growing body of research that explores the relationship between corporate governance compliance and the performance of the firm by examining the Nigerian context with respect to the listed non-financial firms from 2012 to 2019. This study developed the first unique NCGCI of listed non-financial firms from 2012 to 2019, using 32 internal and external corporate governance mechanisms which were based on the combined corporate governance provisions of the Nigerian Code of 2011, the Companies and Allied Matters Act (CAMA) of 1990, and extant literature. In contrast to existing Nigerian findings, and using both the compliance index and the equilibrium variable models with the fixed effects panel estimation method, we argue that compliance with corporate governance codes does not necessarily lead to better performance by listed non-financial firms. Specifically, there was a negative but insignificant relationship between the NCGCI and the independent variables. Further, the CEO non-duality and female board membership indicated a significant but negative relationship with NAT, Tobin’s Q and ROE. However, the market share indicated a significant positive relationship with ROE. The frequency of board meetings indicated a negative and significant relationship with NAT only. The gender diversity was significant but negatively associated with Tobin’s Q and NAT and not with ROE. The study motivates the need to base corporate governance frameworks on the peculiarities of the firm, industrial sector and country.

agency theory; corporate governance; Nigeria; Tobin’s Q; ROE; NAT; non-financial; firms; fixed-effect; multivariate-regression; quantitative research, compliance index, equilibrium variable model.

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