Corporate Governance Mechanisms And Banks Capitalization In Nigeria

Abstract

One crucial challenge facing corporations the world over is management as it can attract or distract investors. This study examined corporate governance mechanisms and bank capitalization in Nigeria to find out the effect of board composition, Board size, Ownership structure, Board meeting, and Audit committee on bank capitalization. The ex-post-facto research design was adopted and data was sourced from the annual account of banks in our study. The tested variable is bank capitalization measured with the value of outstanding shares while the predictor variables are board composition, size, ownership structure, audit committee, and board meeting. Descriptive statistics, normality test, multicollinearity test, and panel data regressions of OLS regression were all conducted.The test of hypotheses showed that board size and ownership structure were found to be significant while board composition, audit committee, and board meeting were indicated to be insignificant. We conclude that corporate governance mechanisms are not a significant determinant of bank capitalization in Nigeria as evidenced in our result. we recommended that codes of governance should be strengthened to avoid distress and failure of banks and that Nigerian Banks should as far as possible, maintain good governance to avoid being distressed.