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

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.