EFFECT OF CORPORATE GOVERNANCE ON PERFORMANCE OF LISTED INSURANCE FIRMS IN NIGERIA

Abstract

Despite the huge potential of Nigeria financial and non-financial institutions, Nigerian insurance industry still performs below expectation notwithstanding all efforts of owners, managers and government. This study examined the effect of corporate governance (board size, non-executive directors, block ownership and CEO Tenure being corporate governance mechanisms) on performance (Tobin Q) of listed insurance companies in Nigeria from 2012-2021. The research design used in the study is the exploratory research design. The population for this study is all twenty-three (23) insurance firms listed on the Nigerian Stock Exchange (NSE) as at December, 2021. Secondary data was collected and analysed for this study, sourced from Nigerian Stock Exchange (NSE) Fact book and the listed firm’s published financial statements for the period of 2012-2021. Panel regression technique was used to analyse the data. The study found out that board size, block owner-ship has a positive but insignificant effect on the performance of listed insurance firms, while CEO Tenure and non-executive directors had positive and significant effects on the performance of the listed insurance firms. The study recommends that since board size and block ownership have been insignificant to the performance but show a positive effect, then the ownership of the listed insurance firms in Nigeria should continue to improve on their board size practices by increasing their number of board members and block ownership by reducing the percentage of block owners in their firms so that their positive effects may become significant. On the other hand, the firms can continue with their practices on CEO tenure, and non-executive directors since they already exhibit positive and significant influences on performance in the listed insurance firms.