Corporate Governance and Firm Performance of Listed Consumer Goods Companies in Nigeria
Mayowa Ebenezer Ariyibi *
Department of Banking and Finance, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.
Olusola Enitan Olowofela
Department of Banking and Finance, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.
Olaiya Kehinde Isaig
Department of Banking and Finance, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
We examine the impact of corporate governance on firm performance using the accounting measures based on the profitability status of the companies depending on cash flows and inflow from the income statement. In a sample of selected consumer goods companies, the study revealed that board size has positive significant effect on return on sales. Board size and board independence has positive significant effect on profit margin. It also revealed that board size and board independence negative significant effect on operating cash flow. Based on the findings, it is recommended that the organization should take cognizance of its board size since it influences the rate of turnover which is an intrinsic component of the overall performance of the organization. The organization should make sure the board size is regulated on a low-cost reduction basis so it does not induce a negative impact on the profitability status of the organization.
Keywords: Corporate governance, firm performance, board size, board independence