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RESEARCH PROPOSAL

MAS 499

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akinyemi daniel
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18 views8 pages

RESEARCH PROPOSAL

MAS 499

Uploaded by

akinyemi daniel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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TITLE PAGE

The Impact of Corporate Governance on Financial Performance of Listed Manufacturing


Companies in Nigeria

Submitted by:
Name: Badmus Omoyeni Dorcas
Department: Accounting Department
Supervisor Name: Mr O.T Odunsi
University Name: Olabisi Onabanjo University
Date: 20th of November
CHAPTER ONE

1.0 Introduction

Corporate governance has gained significant attention in recent years, especially in emerging
economies like Nigeria. As manufacturing companies strive to maintain profitability and attract
investors, the need for sound governance practices has never been more crucial. Corporate
governance provides a framework for ensuring transparency, accountability, and ethical
practices in decision-making.

1.1 Background of the Study


In Nigeria, the manufacturing sector plays a pivotal role in economic growth and employment
creation. However, financial mismanagement and governance lapses have undermined investor
confidence, raising questions about the relationship between governance structures and
financial performance. Listed manufacturing companies, being publicly traded, are under
constant scrutiny to adhere to governance standards.

1.2 Problem Statement


Despite the adoption of corporate governance codes, the manufacturing sector in Nigeria
continues to face financial and operational challenges. This raises an important question: Are
corporate governance practices influencing the financial performance of these companies?

1.3 Research Objectives


1. To examine the relationship between corporate governance and financial performance in
Nigerian manufacturing companies.

2. To analyze the effect of board composition, ownership structure, and audit committee on
financial performance.

3. To evaluate how corporate governance practices align with global standards in listed
manufacturing firms in Nigeria.

1.4 Research Questions


1. What is the relationship between corporate governance practices and financial performance
in listed manufacturing companies?
2. How do board composition, ownership structure, and audit committees impact financial
performance?

3. To what extent do Nigerian manufacturing companies adhere to global corporate governance


standards?

1.5 Scope of the Study


This study focuses on listed manufacturing companies in Nigeria, analyzing data from the last
five years (2018–2023). It investigates corporate governance practices such as board structure,
ownership distribution, and audit committees in relation to financial performance metrics like
return on equity (ROE) and return on assets (ROA).
CHAPTER TWO

2.0 Literature Review

This section reviews relevant theories and empirical studies on corporate governance and
financial performance.

2.1 Theoretical Framework


Agency Theory: Suggests that conflicts of interest between management (agents) and
shareholders (principals) can be mitigated through effective governance mechanisms.

Stakeholder Theory: Emphasizes balancing the interests of all stakeholders, including


employees, customers, and shareholders, in governance practices.

2.2 Empirical Studies


Studies have shown mixed results regarding the relationship between corporate governance
and financial performance. For instance, Yermack (1996) argued that smaller boards are more
effective in decision-making, leading to improved financial outcomes.

In Nigeria, Okpara (2011) found that board independence significantly enhances financial
performance, particularly in publicly traded firms.

2.3 Gaps in Literature


While previous studies have explored governance in the financial sector, research focusing
specifically on listed manufacturing companies in Nigeria is scarce. This study bridges that gap
by providing insights into the manufacturing sector.
CHAPTER THREE

3.0 Research Design

3.1 Methodology
This research will adopt a quantitative approach, relying on secondary data from annual reports
of listed manufacturing companies and the Nigerian Exchange Group

3.2 Population and Sampling


The population comprises all manufacturing companies listed on the Nigerian Exchange Group
as of 2023. A purposive sampling technique will select companies based on availability of
complete governance and financial performance data.

3.3 Data Collection Methods


Data on corporate governance practices (board size, board independence, ownership structure,
and audit committee characteristics) will be extracted from annual reports. Financial
performance metrics (ROE, ROA, and Tobin's Q) will also be obtained.

3.4 Data Analysis Techniques


Descriptive statistics will summarize data, while regression analysis will test the relationship
between corporate governance variables and financial performance. Software like SPSS or
Stata will be used for analysis.

3.5 Ethical Considerations


All data will be sourced ethically, ensuring confidentiality and avoiding any manipulation.
EXPECTED RESEARCH OUTCOMES
The expected outcome of this research is to provide empirical evidence on the relationship
between corporate governance practices and the financial performance of listed manufacturing
companies in Nigeria. Specifically, the research aims to:

1. Highlight the Importance of Corporate Governance:

Demonstrate that companies with strong governance practices (e.g., independent boards,
effective audit committees) tend to perform better financially, as reflected in metrics like ROA
and ROE.

2. Identify Key Governance Factors:

Pinpoint which aspects of corporate governance (e.g., board independence, audit committee
effectiveness) have the most significant impact on financial performance.

3. Address Governance Gaps:

Uncover weaknesses in current governance practices within Nigeria's manufacturing sector and
provide actionable recommendations for improvement.

4. Contribute to Policy and Practice:

Offer insights for policymakers and corporate managers to design better governance
frameworks that align with Nigeria’s unique business environment.

5. Add to Existing Literature:

Fill the research gap by focusing on the Nigerian manufacturing sector, providing localized
insights that complement global findings.

By achieving these outcomes, the study is expected to contribute to the understanding of how
effective governance can drive sustainable financial success in Nigeria's critical manufacturing
sector.
Reference List
1. "Corporate Governance Mechanisms and Financial Performance of Listed Companies in
Nigeria"
Published in the British Journal of Management and Marketing Studies (2023).

2. "Corporate Governance and Manufacturing Firms’ Financial Performance in Nigeria"


Published in Asian Journal of Economics, Business, and Accounting (2024).

3. “Effect of Corporate Governance on Financial Performance of Manufacturing Firms in


Nigeria” (2023) bwjournal.org

4. "The Role of Audit Committees in Enhancing Corporate Governance and Financial


Performance"
Published in Global Journal of Finance and Economic Management (2022).

5. "Board Independence and Corporate Performance in Nigerian Manufacturing Firms"


Published in the Journal of Contemporary Management Issues (2020).

6. "Board Size and Return on Assets in Listed Manufacturing Companies"


Published in The Journal of Emerging Economies and Policy Research (2021).

7. "Impact of Board Composition on Firm Financial Performance in Nigeria"


Published in Nigerian Journal of Management Studies (2023).

8. "Corporate Governance Mechanism and Financial Performance of Listed Companies in


Nigeria” (2022) a journals

9. "Effect of Board Diversity on Financial Performance of Manufacturing Companies"


Published in Journal of Corporate Finance Studies (2021).

10. "The Moderating Role of External Audit in Corporate Governance and Financial
Performance"
Published in International Journal of Business and Management Science (2022).
11. "Relationship Between Managerial Ownership and Financial Performance"
Published in Journal of Financial Studies in Africa (2023).

12. "Governance Mechanisms in Nigeria: Challenges and Opportunities"


Published in International Journal of Accounting and Finance Research (2024).

13. "Corporate Governance and Economic Value Added in Manufacturing Firms"


Published in Journal of Value-Based Management (2022).

14. "Ownership Structure and Its Impact on Firm Performance in Emerging Markets"
Published in Journal of Emerging Markets Finance and Trade (2021).

15. "Effect of Corporate Governance on Financial Performance of Manufacturing Firms in


Nigeria” (2021) researchgate.net

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