Abstract
This study investigates the relationship between share price and corporate governance of selected Nigeria quoted companies. The broad objective of the study is to find out if the size of the board is positively related to share price and also to ascertain if the independence of the board is related to share price. This study used a sample of 30 quoted companies in Nigeria between 2013 and 2015. In analyzing the data, the unbalanced panel multiple regression was adopted to identify the possible effects of board characteristics on share price in selected Nigerian quoted companies.
The findings revealed that share price random effect panel regression results shows that all our board characteristics variables such as Board Size, board independence, CEO duality, board gender diversity and board members representation in committees had not significant influence on share prices of quoted companies in Nigeria. This study therefore, recommended that better share price improvement targets and cost efficiency be given top priority in the practice of good corporate governance in Nigeria.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Researchers over the years have established that the performance of a board is influenced by the characteristics of the board. These characteristics include board size, CEO duality (leadership) board composition (Independence), board committees and diversity (Gender) (Christopher, 2012).However, interest in board characteristics has grown tremendously in the past decade with the general feeling that sound financial performance excuses poor board. Corporate scandals, environmental concerns and globalization have all played their part in raising shareholders and public awareness on how companies should be governed.
The call for increased and more restrictive corporate governance mechanism in Nigeria have stemmed after the World Bank (2008) issued a report on the observance of standards and codes regarding the country’s compliance with the corporate governance regulations by the Organization for Economic Cooperation and Development (OECD) in the report, majority of the guidelines set by the OECD have been partially observed in Nigeria, which triggers the need to intensify the implementation of corporate governance in the country. As a result, in 2001 the Securities and Exchange Commission of Nigeria set up a committee that came up with a Code of Best Practices for public Companies in Nigeria (“The Code”) that became operational in 2003. The review of the code began in 2010 and finally became operational in March 2011.The Code of Corporate Governance (CCG) has stated that “the essence of corporate governance is transparency disclosure”.