IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i2p92-d1586261.html
   My bibliography  Save this article

Corporate Governance Mechanism and Bank Performance, New Insights from Emerging Economy: Evidence from Nigeria Banking Sector

Author

Listed:
  • Olusola Enitan Olowofela

    (Department of Finance and Investment Management, College of Business and Economics, University of Johannesburg, Johannesburg 2092, South Africa)

  • Hermann Azemtsa Donfack

    (Department of Finance and Investment Management, College of Business and Economics, University of Johannesburg, Johannesburg 2092, South Africa)

  • Celestin Wafo Soh

    (Department of Mathematics & Statistical Science, College of Science, Engineering and Technology, Jackson State University, Jackson, MS 39217, USA)

Abstract

We investigated the relationship between corporate governance mechanisms and bank performance in the Nigerian banking sector. We focused on data from 2012 to 2022 extracted from the balance sheets of deposit money banks in Nigeria. We employed the Generalized Method of Moments (GMM) with Stata 13 and Python library to analyze the data. The research underscores the positive influence of non-executive directors and effective credit risk management on risk-adjusted return on assets in the Nigerian banking sector. Conversely, larger board sizes and higher levels of independence negatively impact performance. Notably, corporate governance variables do not significantly determine risk-adjusted return on equity, except for a negative association with lending rates. Practical implications include advocating for non-executive directors, optimizing board size and prioritizing robust credit risk management for enhanced financial outcomes. This research contributes to understanding the crucial role of corporate governance in the Nigerian banking sector, emphasizing its significance for prudent risk management and stakeholder confidence.

Suggested Citation

  • Olusola Enitan Olowofela & Hermann Azemtsa Donfack & Celestin Wafo Soh, 2025. "Corporate Governance Mechanism and Bank Performance, New Insights from Emerging Economy: Evidence from Nigeria Banking Sector," JRFM, MDPI, vol. 18(2), pages 1-19, February.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:2:p:92-:d:1586261
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/2/92/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/2/92/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:2:p:92-:d:1586261. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.