ABSTRACT

The study investigated effect of corporate governance on performance of deposit money banks in Nigeria. It extracted data from annual reports of 5 selected banks from 2010 to 2016 based on availability of data. The study therefore adopted ex post facto research design and used board size and board composition as proxies for corporate governance while net profit margin, return on assets and return on equity were employed as proxies for performance of banks. The unit root test conducted revealed that the variables are stationary but integrated with a combination of ordinary and first difference. The study therefore used the Autoregressive Distributed Lag specifically the Bounds test to estimate the relationship of the variables. From the Wald test conducted, the results established that board size and board composition jointly has influence on each of the performance proxies. It was also established that there is significant effect of corporate governance on return on assets and the effect of corporate governance on net profit margin of deposit money banks in Nigeria is significant which confirms the existence of long run relationship between corporate governance and net profit margin of deposit money banks in Nigeria. The study concludes that there is existence of long run relationship between corporate governance and performance of deposit money banks in Nigeria. It therefore recommends that shareholders of deposit money banks should ensure that the size of their board should be consistent with the requirements and that the board composition should include members that have financial expertise.