Corporate governance and financial performance of listed deposit money banks in Nigeria: moderating role of regulatory compliance
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Abstract
The persistent cases of corporate failure and financial distress among Deposit Money Banks in Nigeria have continued to raise concerns about the effectiveness of corporate governance structures in ensuring sound financial performance. This study examined the effect of corporate governance mechanisms on the financial performance of listed Deposit Money Banks in Nigeria, considering the moderating role of regulatory compliance. The study adopted an ex-post facto research design, utilizing secondary data extracted from the published annual reports of all fourteen (14) listed deposit money banks in Nigeria for the period 2010–2024. Multiple regression analysis was conducted using STATA software to test the formulated hypotheses. The results revealed that board composition and audit committee both have a significant and positive impact on the financial performance of Nigerian DMBs, suggesting that sound governance structures enhance operational efficiency and profitability. Moreover, regulatory compliance was found to significantly strengthen the relationship between audit committee and financial performance, though its moderating effect on board composition was not statistically significant. The study concludes that effective corporate governance, complemented by strict regulatory compliance, remains critical in improving the financial performance and sustainability of Nigerian banks. It recommends that regulators should intensify compliance monitoring by ensuring that banks adhere to CBN reporting guidelines while strengthening governance frameworks through board independence, financial expertise, and accountability.
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