Abstract:

Every profit oriented business organization that is into the production of goods and rendering of services engage in activities that is geared towards to attainment of the objective of profit maximization. The organizational objectives of the company is what deterimnes the type of structure the company puts in place in an attempt to achieve the set objectives. Corporate governance has been acliamed to be a major tool for enhancing corporate image, reduce missapropriation of fund, attract investors as well as improve the performance of the company. This study however examines the role of corporate governance mechanisms such as board size, board independence, audit committee size, audit committee independence, ownership structure, dualisation of chairman and ceo position on the financial performance of listed companies in Nigeria. Using return on asset (ROA) as a proxy for financial performance, the weighted fixed effect regression method of analysis was used to determine the type of relationship that exists between the corporate governance variables and financial performance of Nigerian compoanies. The study found that there is a significant positive relatiionship between board independence and management ownership with financial performance of Nigerian companies. There is a significant negative relationship between audit committee size, block ownership and duality of chairman and ceo position with financial performance of Nigerian companies. This study therefore recommends that regulators of business entities in Nigeria should consider the corporate governance variables and their impact on the financial performance of listed companies in Nigeria as the businesses are major instruments for improving economic development and attracting foreign investment.