Corporate governance and capital structure: Evidence from Nigeria listed financial services firms

Purpose – This study examines the link between corporate governance using board size, outside directors, ownership concentration, managerial ownership, director remuneration, and CEO duality, and capital structure based on total debt ratio and the long-term debt ratio of Nigeria listed non-financial services firms. Design/methodology/approach – A multiple regression analysis was used to estimate the relationship between corporate governance and capital structure during 2012-2021. Findings – The results suggest that board size, non-executive directors, and ownership concentration are positively related to total debt ratio and long-term debt ratio, whereas director remuneration is negatively related. Managerial ownership is negatively related to long-term debt ratio. CEO duality is found to be insignificant. Control variables such as profitability and liquidity are negatively related to total debt ratio and long-term debt ratio, whereas firm size is positively related. Asset tangibility is positively related to long-term debt ratio and negatively related to total debt ratio. Practical implications – The results provide support to corporate managers in establishing an optimal capital structure, and to regulators for enacting laws and developing institutional support to make corporate governance mechanisms work more effectively in Nigeria. Originality/value – The results contribute to the literature by illuminating the significant links between corporate governance and capital structure of listed non-financial services firms in Nigeria. Note, however, the results are useful to listed non-financial services companies in Nigeria.