Abstract
The objective of the study is to determine the effectiveness of corporate governance as a strategic tool in improving performance of listed manufacturing company in Nigeria. The specific objective is to examine the relationship between corporate governance mechanisms and performance of manufacturing firms in Nigeria. This study adopted quantitative research; the population for the study is seventy four, which is the total number of listed manufacturing companies in Nigeria. Twenty manufacturing companies were purposively selected from the seventy four manufacturing companies listed on the Nigeria stock exchange that formed the population of the study. The study is based on content analysis of the selected firms’ annual reports for ten years, from year 2008- 2017. Time series data were collected to determine corporate governance and profitability performance of the selected companies. Five (5) aspects of corporate governance were investigated; these include board size, gender, independence, meeting and audit committee size. The data collected were analyzed using panel data analysis. Findings revealed that heterogeneity effect across firms and over time are incorporated into the model via the error term, Board Size (BOS) and Board Gender Disparity (BGD) had negative impact on the financial performance of manufacturing firms in Nigeria. It is recommended that organizations should use corporate governance as a strategic tool to achieve corporate objectives especially by ensuring the board meets regularly to monitor and control. Keywords: Audit Committee Size, Board Gender Disparity, Board Independence, Board Meeting, Board Size, Corporate Governance, Corporate Performance, Strategic Management DOI : 10.7176/RJFA/10-14-11 Publication date :July 31 st 2019
Highlights
Strategic management specifies the mission, vision and objectivesof organizations; involves the design of polices and plans, project and programs to achieve objectives; and allocates resources to implement polices plans, projects and programs
The first discovery was that board size has a negative and significant effect on the profitability of manufacturing firms in Nigeria measured using return on assets. This implies that roles of the members of the board in improving the monitoring functions, improve governance and increase returns have been negatively affecting the performance of firms in terms of return on assets
It was gathered that board meeting had positive effect on return on assets of the sampled manufacturing firms in Nigeria, showing that increased number of meetings might lead to enhanced performance of manufacturing firms in Nigeria
Summary
Strategic management specifies the mission, vision and objectivesof organizations; involves the design of polices and plans, project and programs to achieve objectives; and allocates resources to implement polices plans, projects and programs. On the other hand, can provide a system by which the goals and objectives of organization are set and accomplished. Corporate governance should provide checks, balances, and incentives to spot, correct bad decisions and if corporate governance is strengthened, companies can strengthen their strategies and their ability to compete. Strategic management uses different strategies to become successful and remain successful. They are set of decisions and actions that can be taken to achieve corporate objectives by developing effective’s strategies. Strategies are plans or decisions put in place to achieve set of objectives of an organization. Corporate governance is a strategic management tool for achieving business goals and objectives. Corporate governance is a strategic management tool for achieving business goals and objectives. (Arganti & Druck, 2004).Weak corporate governance can lead to weak organization strategy and the strategic position and success of an organization depends on good corporate governance
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