The Implications of Corporate Governance on Financial Institution’s Performance in

The Central Bank of Nigeria (CBN) (2006) had asserted that disagreement between the board and management of financial institutions usually gives rise to board squabbles and ineffective board oversight functions. This is why the objective of this article is to determine the extent to which corporate governance practices impacts on financial institutions performance. To validate this assertion, a sample of thirty three financial institution listed on the Nigerian stock Exchange from 2004 to 2008 was used for this study. Multiple regressions Analysis and ordinary least square (OLS) method of estimation were applied. The results showed that there is a positive correlation between corporate governance practices and firms performance. The other two performance proxies that is, return on Equity and two corporate governance practices namely; the firms ’ board size and audit committee also showed positive relationship. However, there was a negative relationship between the net profit margin, the firms ’ board size and audit committee. The study could not establish a relationship between the two performance variables, namely; Return on Equity and Net profit Margin, and the executive officers ’ status. It is recommended that corporate governance mechanisms be objectively structured to enhance optimal performance of corporate institutions in Nigeria