Corporate Governance Practices and Performance of Selected Deposit Money Banks in Nigeria

Abstract

This study examined the relationship between corporate governance practice and the performance of deposit money banks in Nigeria. Despite existing studies on corporate governance in Nigerian banks, few have examined the mediating role of transformational leadership using the balanced scorecard as a performance metric. Primary data was generated using questionnaire instrument with a Likert scale of 1–5 points, taking into account the study's objectives, and a sample size of 389 respondents was selected randomly. Smart Partial Least Squares (SmartPLS) v3 was used for inferential statistics, while the Statistical Product for Social Science (SPSS) v25 was used for descriptive statistics. The cross-sectional study's results showed that the study's validity and reliability satisfied the requirements since the average variance extracted (EVA) was >0.50 and the Cronbach alpha and composite reliability were >0.70. The results showed that, except for board size, board meeting, and board independence, which had negative effects, all exogenous variables had a substantial impact on the endogenous variable with a commensurate mediating effect of transformational leadership.CEO duality showed the strongest positive effect (CEO -> TSL β = 0.260, t = 3.637, p = 0.000, <0.05), (TSL -> BSC β = 0.520, t = 8.902, p = 0.000, <0.05).

Findings indicate that given the strong mediating role of transformational leadership, regulators should enforce leadership training programs alongside governance reforms.