The Impact of Corporate Governance and Internal Control on the Performance of Some Selected Listed Manufacturing (Conglomerates) Companies in Nigeria
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Date
2016
Authors
Kazeem, B.A
John, U
Journal Title
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Publisher
University of Lagos Press and Bookshop Ltd
Abstract
The financial scandals around the world have stunned the effectiveness and efficiency of existing corporate governance practices in corporate companies towards promoting transparency and accountability. Today, to guarantee corporate victory, corporate governance practice compatibility with global standards has become a significant element. Most public corporations in Nigeria were either dead or simply drain pipes of public resources while the few private factories that were merely available were working below capacity due to lack of corporate governance that has resulted into misuse of public funds and corruption. On the basis, this research study examines the impact of corporate governance and internal audit on financial performance of listed manufacturing companies in Nigeria between 2002 and 2011 using Nestle Nigeria PIc, Cadbury Nigeria PIc and Unilever Pic as case study. The study employed and modified the model of Hutchinson (2009). The employed panel regression model regressed return on asset (ROA) and return on equity (ROE) as financial performance indicators on corporate governance (COG), audit committee independence index (ACJ), and equity-debt mix (EDR) as explanatory variables. Empirical results revealed that corporate governance and audit committee independence have significant and negative effect, while equity-debt ratio (EDR) has significant and positive effect on financial performance proxied by return on asset. Thus, the results further revealed that corporate governance (COG), equity debt ratio (EDR) and audit committee independence (ACJ) have negative effect on financial performance proxied by return on equity (ROE) of listed manufacturing companies in Nigeria. The result concluded that corporate governance and internal audit independence have significant impact on listed manufacturing companies' financial performance in Nigeria. Manufacturing companies should endeavour to create additional wealth in total asset in order to enhance sales level and consequently enhance returns on assets and equity through effective and proper management of governance structure and pattern of corporate affairs, ethics and code of conducts.
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Keywords
Corporate Governance , Internal Control , Manufacturing Sector
Citation
Kazeem, B,A, John, U (2016), The Impact of Corporate Governance and Internal Control on the Performance of Some Selected Listed Manufacturing (Conglomerates) Companies in Nigeria. Nigeria's Industrial Development, Corporate Governance and Public Policy,p. 495-522.