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Corporate Governance and Non-financial Performance of Medium-sized Firms in Nigeria: A CB-SEM Approach

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  • Babatunji Samuel Adedeji
  • Md Uzir Hossain Uzir
  • Mohammad Mizanur Rahman
  • Ishraq Jerin

Abstract

This study investigates the perceptions of firm executives with respect to the extent of the influence of corporate governance (CG) practices on the non-financial performance (NFP) of medium-sized firms in Nigeria. The theoretical support for the research is from the stakeholder and agency theories. The cross-sectional survey and the cluster and stratified probability proportionate sampling methods are adopted, while the data collection is through a structured questionnaire that covers four CG indicators of board size, director’s qualification, ownership structure and board audit committee. The co-variance-based structural equation modelling (CB-SEM) technique ensures the analysis of the data collected. The result indicates that CG has significant positive effect on firms’ NFP. This outcome supports the urgent need for the development and execution of CG code of ethics for the non-listed firms alongside a regulatory agency for ensuring monitoring and compliance. The drawbacks are inclusive of the measure of variables on linear relationship basis and non-adoption of the longitudinal approach for the study. Future studies need to look at the usage of the intervening variables which, can further aid in evaluating the relationships of the research variables and their indirect and total effects.

Suggested Citation

  • Babatunji Samuel Adedeji & Md Uzir Hossain Uzir & Mohammad Mizanur Rahman & Ishraq Jerin, 2019. "Corporate Governance and Non-financial Performance of Medium-sized Firms in Nigeria: A CB-SEM Approach," Indian Journal of Corporate Governance, , vol. 12(2), pages 156-168, December.
    • Handle: RePEc:sae:ijcgvn:v:12:y:2019:i:2:p:156-168
    DOI: 10.1177/2349139619880983
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    References listed on IDEAS

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    4. Babatunji Samuel Adedeji & Tze Sen Ong & Mohammad Mizanur Rahman & Olusoji Olumide Odukoya & Md. Kausar Alam, 2019. "Corporate Governance, Sustainability Initiatives and Firm Performance: Theoretical and Conceptual Perspectives," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(1), pages 35-47.
    5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    7. Babatunji Samuel Adedeji & Tze Sen Ong & Mohammad Mizanur Rahman & Olusoji Olumide Odukoya & Md. Kausar Alam, 2019. "Corporate Governance, Sustainability Initiatives and Firm Performance: Theoretical and Conceptual Perspectives," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(1), pages 35-47, January.
    8. Mohammad Jizi & Aly Salama & Robert Dixon & Rebecca Stratling, 2014. "Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector," Journal of Business Ethics, Springer, vol. 125(4), pages 601-615, December.
    9. Mohammad Mizanur Rahman & Samuel Babatunji Adedeji & Md Abdul Bashir & Jahirul Islam & Md Reaz & Arif Md Khan, 2018. "Mediation Using Covariance Based-Structural Equation Modeling (CB-SEM): The Why and How?," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(12), pages 434-442.
    10. Mohammad Mizanur Rahman & Samuel Babatunji Adedeji, & Md Abdul Bashir & Jahirul Islam & Md Reaz & Arif Md. Khan, 2018. "Mediation using covariance based-structural equation modeling (CB-SEM): the why and how?," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 8(12), pages 434-442, December.
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