Title: Corporate Governance And Manufacturing Firms' Financial Performance
Authors: Okiemute Omenasa Unusotame and Ehiedu Victor C.
Volume: 9
Issue: 5
Pages: 103-110
Publication Date: 2025/05/28
Abstract:
This study explores the influence of corporate governance mechanisms-specifically board size, board independence, and CEO quality-on the financial performance of manufacturing firms in Nigeria. Drawing on agency theory, resource dependence theory, and stewardship theory, the research employs a panel dataset of 65 publicly listed firms from 2014 to 2023. Firm performance is measured using return on assets (ROA), return on equity (ROE), and net profit margin (NPM). Methodologically, the study applies fixed and random effects regression models, supplemented by generalized method of moments (GMM) estimation to address potential endogeneity concerns. Empirical findings reveal that board independence and CEO quality exhibit statistically significant and positive effects on all three performance indicators, while board size is negatively associated with firm performance, albeit marginally. These results underscore the importance of strengthening internal governance structures-particularly by enhancing board autonomy and CEO competence-as a pathway to improved corporate performance in emerging markets. The study offers practical implications for corporate governance reform and contributes to the growing body of literature on governance-performance dynamics in developing economies.