Abstract
This study ascertains corporate governance and firm performance. The broad
objective of the study is to find out the
relationship between corporate governance and firm performance and also to
ascertain if corporate governance is essential in achieving public confidence
in corporate entities. Corporate governance helps promote enterprise
accountability and enforcement of laws and regulation which has created a
culture of compliance that enable business to improve and therefore be in good
stead to attract further investment. Corporate governance has remained a great
concern in a business world today. The primary source of data was adopted where
probability sampling was used to
select 100 personnel which serve as the sample size of the study. The
chi-square statistical tool was used to test the stated hypotheses. The
findings revealed that corporate
governance is essential in achieving public confidence in corporate entities.
It was concluded that good governance
guarantees the realization of credible and conducive environment necessary for
attainment of economic development. It was recommended among others that a high
degree of mutual trust, respect and understanding should exist among the
shareholders, board of directors and management, in order to avoid the
incidence of conflicting goals and objectives.
TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgments iv
Abstract v
Chapter One: Introduction 1
1.1 Background
to the Study 1
1.2 Statement
of Problem 3
1.3 Research
Questions 3
1.4 Objectives
of the Study 3
1.5 Statement
of Hypotheses 4
1.6 Significance
of the Study 4
1.7 Scope
of the Study 5
1.8 Limitations
of the Study 5
1.9 Definition
of Terms 6
Chapter Two: Review of Related Literature 8
2.1 Introduction
8
2.2 Definition
of Corporate Governance 9
2.3 Concept
of Corporate Governance 10
2.4 Parties
to corporate governance 11
2.5 Principles
of Corporate Governance 12
2.6 Mechanism
and control of corporate governance 14
2.7 The
Rational of Corporate Governance 16
2.8 Review
of Development of Good Corporate Governance Practices in Nigeria 17
2.9 Overview of Corporate Governance Particle 19
2.10 The Role of the Boards of Directors 19
2.11 Corporate Governance and Public Sector in Nigeria 20
2.12 Good Governance Standard for Public Sector 22
2.13 Symptoms of Bad Corporate Governance 23
2.14 The Effectiveness of Corporate Governance 26
Chapter Three: Research Method and Design 30
3.1 Introduction
30
3.2 Research
design 30
3.3 Description
of the Population of the Study 31
3.4 Sample
Size 31
3.5 Sampling
Techniques 31
3.6 Sources
of Data Collection 32
3.7 Method
of data Presentation 33
3.8 Method
of Data Analysis 33
Chapter Four: Data Presentation, Analysis
and Interpretation 34
4.1 Introduction
34
4.2 Presentation
of Data 34
4.3 Data
Analysis 34
4.4
Hypothesis Testing 41
Chapter Five: Summary of Findings,
Conclusion
and Recommendations
5.1 Introduction 46
5.2 Summary
of Findings 46
5.3 Conclusion
47
5.4 Recommendation
48
References 50
Appendix A 52
Appendix B 53
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Corporate governance involves the
directions and control of those who have responsibility for the day to day
running of the organization. Corporate governance takes into consideration
company stakeholders, company management, and the board of directors. Other
participant may include employees and supplier, partners, customers,
governmental and professional organization regulators and the community in
which the corporation has a presence (Alfaki, 2005). However, there are so many
interested parties, it is inefficient to allow them to control the company
directly. Instead, the corporation operates under a system of regulations that
allow stakeholders to have a voice in the corporation commensurate with their
stake, yet allow the corporation to continue operating in an efficient manner.
Corporate governance also takes into account audit procedures, in order to
monitor the outcomes and how closely they adhere to goals, and to monitor the
organization as a whole to work toward corporate goals. By using corporate
governance procedures widely and sharing results, a corporate can motivate all
stakeholders to works towards the corporation goal by demonstrating the
benefits to stakeholders of the corporate success.
Corporate governance has succeeded in
attracting a good deal of public interest because of its apparent important for
the economic health of firms and society in general. Nwachukwu (2003) defined
corporate governance as the processes and structures by which the business and
affairs of an institution are directed and manage in order to improve long term
shareholders value by enhancing corporate performance and accountability while
taking into account the interest of other stakeholders. Corporate governance is
therefore, about building credibility, ensuring transparency and accountability
as well as maintaining an effective channel of information disclosure that
would foster good corporate performance.
1.2 Statement of Problem
The effect and need to find adequate
solution to failures of corporations in Nigeria is a matter that should not be
put aside by a mere wave of hands this is one to the fact, good corporate
governance has been discovered to be a major tool to the growth of the
organizations in Nigeria
1.3 Research Questions
In the study the
following research questions are asked in order to achieve the objectives of
the studies
i. What
is the relationship between corporate governance and firm performance?
ii. Is
corporate governance essential in achieving public confidence in corporate
entities?
1.4 Objectives of the Study
The primary objectives of this study
are:
i. To
find out the relationship between corporate governance and firm performance.
ii. To
ascertain if corporate governance is essential in achieving public confidence
in corporate entities.
1.5 Research Hypotheses
Hypothesis
One
HO: There is no significant relationship between
corporate governance and firm performance.
HI: There is significant
relationship between corporate governance and firm performance.
Hypothesis
Two
Ho: The effect of corporate governance is not
essential in achieving public confidence in corporate entities
HI: The effect of corporate governance is
essential in achieving public confidence in corporate entities.
1.6 Significance of the Study
In
regards to the relevance of the study it covers areas which are useful to the
board of directors as regards to their mission, vision, objectives and strategy
of a firm. It is relevant to shareholders by ensuring their confidence to
invest in a particular business which involves protecting their rights.
Companies
will benefit as it ensures the financial viability of business. It also
indicates that the way in which companies are directed and controlled through
governance principles of disclosure and accountability of a company. It is also
relevant to the public sector. Public sector will benefit as it will ultimately
improve economic growth and functional position of the country on a global
level. It is also used as a determinant in developing policy, social economic
analysis and poverty resolute issue.
1.7 Scope of the Study
This research
essentially focuses on the process and structure in which business performance
and the affairs of corporate are directed, managed and controlled. It also
focuses on the dilemmas that result from the separation of ownership and
control. A sample size of 100 was used for effective result.
1.8 Limitations of the Study
The factors that
militate against researcher ability to come out with concrete findings during
the course of researching include:
·
Lack of
necessary materials: The materials sought were not sufficient for the research
as for text works and business journal needed were not gotten at the right
time.
·
Inadequate
internet facilities as it relates to the research work.
·
The problem of
retrieving the questionnaire: Some questionnaires issued to respondents were
lost during the attitudes of the respondents to disclose their personal
information.
1.9 Definition
of Terms
Corporate
Governance: Is a combination of laws, regulations, listing
rules and voluntary private sector practices that enable the corporation to
attract capital, perform effectively, generate profit and meet both legal
obligation and general societal expectation. It is all the corporation
relationship among capital, product, services and even society at large.
Performance
Management: This is a process for establishing a
shared workforce understanding about what is to be achieved in an organization
level. It is about aligning the organization objectives with the employees
agreed measures, skills, competency requirements, development plans and the
delivery of results. The emphasis is on improvement in order to achieve the
overall business strategy and create a high performance workforce.
Management:
is a distinct process consisting of planning, organizing, starring, directing,
coordinating, reporting and budgeting, performed to determine and accomplished
stated objectives with the effective use of human and other resources.
Firm:
A business concern, especially one involving a partnership of two or more
people. It’s a business organization, such as a corporation, Limited Liability
Company. Firms are typically associated with business organizations that
practice law, but the term can be used for a wide variety or business operation
units.
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