Implications Of Poor Corporate Governance Practice On Banking System Stability In Nigeria

Implications Of Poor Corporate Governance Practice On Banking System Stability In Nigeria

Abstract

The broad ideal of this study is to probe the counteraccusations of poor commercial governance practice on the banking system stability in Nigeria. Specifically, the study sought to; examine the effect of board composition on the banking system stability in Nigeria; to estimate the effect of board size on the banking system stability in Nigeria; to ascertain the effect of bank size on the banking system stability in Nigeria. To achieve these objects,ex-post facto exploration design and panel retrogression analysis were espoused. The dependent variable isnon-performing loan to total means and the independent variables are board composition, board size, bank size, and net income; the data generated from individual bank checked fiscal reports were anatomized using panel retrogression models. With respect to the analyses done, the following findings were made at 5 percent position of significance, the study accepted the first alternate thesis that board composition has no significant effect on banking system stability in Nigeria. For the alternate thesis, the study accepted the alternate null thesis and rejected the alternate thesis that board size has significant effect on banking system stability in Nigeria. The study rejected the third thesis which states that bank size has no significant effect on banking system stability in Nigeria. The recrimination of these findings is that when the composition of the board increases, it affects the banking system stability so much as it increases the allowances to be paid thereby adding the charges to be incurred by banks. It was also seen that stability of the banking system doesn’t really calculate on the size of a bank. Advanced number of non- superintendent independent directors promotes rational opinions and creates value for the shareholders. The part of independent directors is veritably important and improves the value of a bank as it shows that they can cover the bank and help the directors to take unprejudiced opinions. Grounded on the below findings, it was recommended that the nonsupervisory and administrative authorities should cover banks nearly to insure that banks misbehave with the commercial governance canons especially when it has to do with board size since it has a significant effect on stability of the banking system and board of directors should insure the perpetration of being regulation similar as lending exposure to an individual and make commercial governance practices a precedence for the banks.

Table Of Contents

Title runner i

blessing ii

instrument iii

fidelity iv

Acknowledgment v

Abstract vi

CHAPTER ONE preface

Background of the Study 1

Statement of Problem 7

objects of the Study 9

exploration Questions 10

exploration thesis 10

compass of the Study 11

Significance of the Study 12

Limitations of the Study 12

CHAPTER TWO REVIEW OF RELATED LITERATURE

Abstract Review 14

exigency of commercial governance Debate 19

introductory rudiments in the new law of commercial governance for banks in Nigeria 22

Principles of commercial governance 24

significance of good commercial governance 25

Counteraccusations of poor commercial governance practice 28

Need for Commercial Governance in Banking System 29

Commercial Governance and Banking System Stability 32

Sources and incarnation of Commercial Governance Practice in Nigerian Banks 34

Empirical Review 37

Theoretical frame 40

CHAPTER THREE METHODOLOGY

Research Design 43

Population and Sample Size of the Study 43

Source of Data 44

Description of Research Variables44

operation of Retrogression Model for the Study 46

ways for Data Analysis 47

trustability and Validity of the Model 49

thesis Testing fashion 49

CHAPTER FOUR FINDINGS

Descriptive Statistics 51

Result of the Correlation Analysis 55

Test of Research suppositions 60

CHAPTER FIVE DISCUSSION OF FINDINGS

Discussion of Result from Descriptive Analysis 64

Discussion of Findings Correlation Analysis 65

Discussion of Results from the suppositions Tests 65

Policy Recrimination of the Findings 67

Major donation of the Study to Knowledge Development 68

CAPTER SIX SUMMARY, CONCLUSION AND RECOMMENDATION

Summary 69

Conclusion 72

Recommendations 72

Suggestions for farther study 73 References 74

excursus