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| Analysis of the Relationship between Corporate Stability, Financial Performance and Social Responsibility in Nigeria |
Alexander Onyebuchi Ude, FCEnt, CNA, Ph.D
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Abstract:
This is a study on the relationship between corporate stability, financial performance and social responsibility of oil and gas companies in Nigeria with the following objectives. To determine how Corporate Social Responsibility (CSR) affects Return on Asset (ROA) of the oil and gas companies in Nigeria, to ascertain the effects of corporate social responsibility on Return On Equity (ROE) of the oil and gas companies in Nigeria and to identify how corporate social responsibility affects the net profit of the oil and gas companies in Nigeria. The study used a cross sectional survey design to carry out the research. The population of the study was all the oil and gas companies in Nigeria. Data collected were analyzed through the Simple Regression Analysis and Partial Correlation. Results of the study revealed that: Donation significantly affects Return on Equity and CSR significantly affects Net Profit of the oil and gas companies in Nigeria, Hence, from the findings of this work the research concludes that there is a strong positive relationship between CSR and financial performance and corporate stability. And that; CSR significantly affects the Return on Assets of the oil and gas companies in Nigeria; CSR significantly affects the return on equity of the oil and gas companies in Nigeria; CSR significantly affects the net profit of the oil and gas companies in Nigeria. Therefore all the null hypotheses have been rejected and the alternative hypotheses accepted. Based on the findings of the study, the following recommendations were made; Companies should carry out operational impact evaluation. This is in order to evaluate the effect of their operation on the community, the environment and the people as this will be able to help and control their CSR practices. It will help them check unwholesome practices; Companies should report regularly to its stake holders their corporate social responsibility practices. The companies are too secretive and do not allow other people have insight of most of their activities, therefore, forums should be created where these are reported to other people; Government should consider allowing all arm's length expenditure on corporate social responsibility for tax purposes to enable the companies become completely socially responsible.
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