Abstract:

This study examined the nexus between corporate governance and the financial performance of the Nigerian banking sector using board size, directors’ equity (proxies for corporate governance) firm size (controlled variable) and return on assets and return on equity (proxies for firm performance). Using the estimation technique of the generalized method of moments, the study showed that board size, directors’ equity and firm size affect the profit performance of Nigerian banks. Based on the above results, the study concludes that corporate governance has significant effect on the profitability of the Nigerian banking sector. The study therefore recommends that the requirement for substantial equity stake by directors of banking institutions be sustained.