Corporate Governance and Bank Performance: a Case Study of Selected Commercial Banks in Nigeria
The main purpose of this study is todetermine the impact ofcorporate governance on theperformance of banks, through an empirical study ofasample ofl0 Nigerian commercial banks during theperiod 2000- 2009. This paper seeks to examine the relationship between internal governance and banks' performance using three variables (board size, board composition, audit committee) and aperformance measure, Return on Assets. Using thefixed effects modelfor apanel least square regression analysis, the results provide evidence of an inverse significant relationship between return on assets and board size as well as audit committee. The implication of this is that the board size should be limited to a sizeable limit and the audit committee should becomposed ofmainly directors with adequate skills, and who arefamiliar with the banking terrain. The results further reveal apositive significant relationship between return on assets and board composition. This implies that when there are more independent directors on aboard, theperformance of that bank invariably increases. These results areconsistent with prior empirical studies.