ABSTRACT
The project “The
effect of good corporate governance on the profit of Zenith International Bank
Plc. is intended to look into the principles by giving the definition,
objectives, significance, problems and other study relating to the company to
enable the auditor make necessary recommendations.
Furthermore, the
research went further to discuss the methodology adopted, in conducting the
research, how data was collected and appropriate analysis and interpretation
was done to make the project meaningful.
Finally, interference was drawn,
and the whole project was summarized and conclude based on researcher
findings.
TABLE OF CONTENT
Pages
Title
Certification i
Dedication ii
Acknowledgement iii
Table of Content iv
CHAPTER ONE
1.1 Introduction
1
1.2 Background of the Study 1
1.1
Scope of the Study 3
1.2
Objective of the Study 4
1.3
Purpose of the Study 5
1.4
Limitation of the Study 6
CHAPTER TWO
2.1
Introduction 8
2.2
Essence of good Corporate Governance 9
2.3
Principles of Corporate Governance 11
2.4
The Collapse of Companies 12
2.5
The Responsibility of Key organs of a Company 13
2.6
Structure of the Board of Director 15
2.7
Ethical and Responsible Decision Making 16
2.8
Integrity of Financial Reporting 18
2.9
Disclosure of Stock Exchange 19
2.10
Protection of Shareholders Right 20
2.11
Risk Management 21
2.12
Performance Evaluation 21
2.13
Remuneration: Fairly and Responsible 22
2.14
Corporate Governance 23
CHAPTER THREE
Research Methodology
3.1
Introduction 27
3.2
Research Design 27
3.3
Data Collection Method 27
3.4
Description of Study Population 27
3.5
Sampling Plan 28
3.6
Description of Data Collection Instrument 28
3.7
Administration of Data Collection Instruments 28
3.8
Analytical Tools and Coding Procedures 30
CHAPTER FOUR
Presentation, Analysis and Interpretation of Data
1.1
Introduction 32
1.2
Analysis of Data 32
1.3
Test of Hypothesis 40
1.4
Discussion of Findings 42
CHAPTER FIVE
5.1
Summary 43
5.2
Conclusion 44
5.3
Recommendation 44
Bibliography 46
Questionnaire
CHAPTER ONE
INTRODUCTION
Corporate
Governance can be defined as the system by which companies are directed and
controlled. Statuary control of corporate governance has been with us for a
long time and has increased overtime. Corporate Governance is the system by
which companies are directed and managed in the best interest of the owners and
investors. It refers to the role of the board of directors, executives and non
executives. Shareholders right and other actions taken by shareholders to
influence corporate decisions.
Corporate
Governance covers all the general mechanisms by which management are led to act
in the best interest of the companies’ owners.
According to
Piplock (2004) “Corporate governance is the set of rules and practices that
government relationship between the managers and shareholders of corporations
as well as other stakeholders like employee creditors, tax authorities, trade
unions, suppliers and other public authorities.
THE ESSENCE OF GOOD CORPORATE
GOVERNANCE
1.
Corporate governance aims to promote culture in
which directors will give privacy to the ethical pursuit of shareholders best
interest.
2.
Corporate governance allows a review of audit
regulation corporate disclosure framework and shareholders participation to
improve the accountability and transparency of companies.
3.
It ensures that audit committee assist the board
of directors in its oversight of the integrity of the financial statement of
the company, as well as compliance with legal and regulatory requirement and
the performance of the company’s internal audit function.
4.
It renders companies to be more credible,
domestically and internationally, and ensure managerial system that promote
creative and progress entrepreneurship.
5.
Corporate governance helps to maximize corporate
value by enhancing the transparency and efficiency of corporation for the
future.
6.
The role of corporate governance is to prevent expropriation to
investors by managers.
7.
Good corporate governance would prevent theft
and fraud thought mechanisms designed by the board and management.
8.
Corporate governance deals with the ways
providers of finance to companies assure themselves of getting a return on
their investment.
STRATEGIC MANAGEMENT IN CORPORATE
GOVERNANCE
Strategic
management is the process of making and implementing strategic decisions or
corporate decision it is about the process of strategic change (Adeleke,
Ogundele and Oyenuga 2004).
Bowman and Asch
(1987) define it as the match an organisation makes between its own resources
and threats, risks and opportunities created by the external environment in
which it operates. Strategy can be seen as the key link between what an
organisation wants to achieve its objectives and policies adopted to guide its
activities and plans for achieving those goals stated in a way as to define the
business the organisation is engaged or is to be engaged in.
The importance
of strategic management within he framework of Corporate Governance are:
(1)
The concept of strategy is assumed to be
concerned with the organisation as a whole.
(2)
It is concerned with the long-term direction of
an organisation.
(3)
It is distinguished from operational matters
which are concerned with the day-to-day aspects of running an organisation.
(4)
The skills of strategic management are
considered to be a high order and often assumed to be found at the senior
levels within the organisation.
Strategic
decisions are concerned with the following issues.
2.
The scorp of the organizational activities e.g
market to serve and in which areas.
3.
How an organisation responds to its external
environment.
4.
The long-term direction of an organisation
rather than the day-to-day issues.
5.
Matching the organisation activities with it
resources capabilities.
THE PRINCIPLES OF CORPORATE GOVERNANCE
The following
could serve as basic principles of corporate governance to be adopted.
1.
Lay solid foundation for management and
oversight.
2.
Structure the board to add value.
3.
Promote ethnical and responsible decision
making.
4.
Safeguarding the integrity of financial
reporting
5.
Making continuous, timely and balanced
disclosure to Stock Exchange.
6.
Respect the right of shareholders.
7.
Recognize and manage risk
8.
Encourage enhanced performance evaluation.
9.
Remunerate fairly and responsibly.
10.
Recognize the legitimate interest of
stakeholders.
1.2 STATEMENT
OF THE PROBLEM
Due to the high
rate of fraudulent practices and financial mismanagement of funds, assets and
information in organisation, so many business including banks have gone down or
liquidated. This high rate of mismanagement will be the statement of problem.
1.3 OBJECTIVES
OF THE RESEARCH WORK
The
following are the objectives of the
study:
a.
To appraise the impact of good corporate
governance on banks and banks profitability.
b.
To appraise the types of decision taken by
management towards the profitability of banks.
c.
To appraise the principles of good corporate
governance system.
d.
To appraise the responsibilities of key organs
of a company.
e.
To make necessary recommendation at the end of
the research work.
1.4 HYPOTHESIS
In our research
work, Ho will be taken as the NULL hypothesis.
Ho: corporate
governance does not contribute to the profitability of banks.
Hi: Corporate
governance contributes to profitability of banks.
1.5 RESEARCH METHODS
The research
work will involve personal interview conducted in the bank chosen as our case
study and the administration of well prepared questionnaires.
1.5
SCOPE OF
THE RESEARCH WORK
Our scope of
work will be limited to Zenith Bank Nigeria Plc, Head office Victoria
Island.
1.6
DEFINITION
OF TERMS
1.
AUDIT
COMMITTEE: A group of people in an organisation who investigate the
financial system and other control system within the organisation.
2.
FINANCIAL
STATEMENT: A statement of financial information about a business position,
profitability and adaptability.
3.
ENTREPRENEURSHIP:
Activities that involves starting and running a business and taking
financial risks.
4.
INTERNAL
AUDIT: An act of appraising and evaluating the audit work carried out in an
organisation.
5.
INVESTOR:
A person or a business that puts money into a project or an activities that
will yield some benefits in the future.
6.
INVESTMENT:
An act of putting money into a project or an activity that will bring some
future benefits.
7.
MANAGEMENT:
The way in which a business planned, organized and controlled to achieve
objectives.
8.
SHAREHOLDERS:
These are owners of companies who invest their money in the companies
shares.
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