ABSTRACT
The broad objective of this study is to investigate the implications of poor corporate 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 evaluate 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 objectives, ex-post facto research design and panel regression analysis were adopted. The dependent variable is non-performing loan to total assets and the independent variables are board composition, board size, bank size, and net income; the data generated from individual bank audited financial reports were analyzed using panel regression models. With respect to the analyses done, the following findings were made at 5 percent level of significance, the study accepted the first alternate hypothesis that board composition has no significant effect on banking system stability in Nigeria. For the second hypothesis, the study accepted the second null hypothesis and rejected the alternate hypothesis that board size has significant effect on banking system stability in Nigeria. The study rejected the third hypothesis which states that bank size has no significant effect on banking system stability in Nigeria. The implication 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 increasing the expenses to be incurred by banks. It was also seen that stability of the banking system does not really rely on the size of a bank. Higher number of non- executive independent directors promotes rational decisions and creates value for the shareholders. The role of independent directors is very important and improves the value of a bank as it shows that they can monitor the bank and help the managers to take unbiased decisions. Based on the above findings, it was recommended that the regulatory and supervisory authorities should monitor banks closely to ensure that banks comply with the corporate governance codes 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 ensure the implementation of existing regulation such as lending exposure to an individual and make corporate governance practices a priority for the banks.
TABLE OF CONTENTS
Title Page                                                                                                                               i
Approval                                                                                                                              ii
Certification                                                                                                                          iii
Dedication                                                                                                                            iv
Acknowledgment                                                                                                                 v
Abstract                                                                                                                               vi
CHAPTER ONE: INTRODUCTION
1.1  Background of the Study                                                                                             1
1.2   Statement of Problem                                                                                                   7
1.3   Objectives of the Study                                                                                               9
1.4   Research Questions                                                                                                       10
1.5   Research Hypothesis                                                                                                     10
1.6   Scope of the Study                                                                                                     11
1.7   Significance of the Study                                                                                             12
1.8   Limitations of the Study                                                                                               12
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1   Conceptual Review                                                                                                       14
2.1.1   Emergency of corporate governance Debate                                                           19
2.1.2   Basic elements in the new code of corporate governance for banks in Nigeria        22
2.1.3Principles of corporate governance                                                                            24
2.1.4Importance of good corporate governance                                                                 25
2.1.5   Implications of poor corporate governance practice                                                  28
2.1.6   Need for Corporate Governance in Banking System                                                29
2.1.7   Corporate Governance and Banking System Stability                                             32
2.1.8   Sources and Manifestation of Corporate Governance Practice in Nigerian Banks   34
2.2      Empirical Review                                                                                                        37
2.3      Theoretical framework                                                                                               40
CHAPTER THREE: METHODOLOGY
3.1      Research Design                                                                                                        43
3.2      Population and Sample Size of the Study                                                                 43
3.3      Source of Data                                                                                                                       44
3.4Â Â Â Â Â Â Description of Research Variables44
3.5      Application of Regression Model for the Study                                                       46
3.6Â Â Â Â Â Â Techniques for Data Analysis 47
3.7      Reliability and Validity of the Model                                                                                   49
3.8 Hypothesis Testing Technique                                                                                         49
CHAPTER FOUR: FINDINGS
4.1      Descriptive Statistics                                                                                                51
4.2      Result of the Correlation Analysis                                                                             55
4.3      Test of Research Hypotheses                                                                                    60
CHAPTER FIVE: DISCUSSION OF FINDINGS
5.1      Discussion of Result from Descriptive Analysis                                                      64
5.2      Discussion of Findings Correlation Analysis                                                             65
5.3      Discussion of Results from the Hypotheses Tests                                                     65
5.4      Policy Implication of the Findings                                                                          67
5.5      Major Contribution of the Study to Knowledge Development                                68
CAPTER SIX: SUMMARY, CONCLUSION AND RECOMMENDATION
6.1      Summary                                                                                                                    69
6.2      Conclusion                                                                                                                 72
6.3      Recommendations                                                                                                     72
6.4      Suggestions for further study                                                                                    73                   References                                                                                                                       74
Appendix
This material content is developed to serve as a GUIDE for students to conduct academic research
IMPLICATIONS OF POOR CORPORATE GOVERNANCE PRACTICE ON BANKING SYSTEM STABILITY IN NIGERIA
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