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The Role of Corporate Governance, Internal Control System on Firms’ Financial Performance

Author

Listed:
  • Adedipe Oluwaseyi Ayodele

    (Department of Accounting and Finance Faculty of Management and Sciences)

  • Olusanya Joseph Olugbenga

    (Bursary Department Sikiru Adetona College of Education Science and Technology Omu-Ajose)

Abstract

The paper is centered on corporate governance, internal control system, and their impact on financial performance of listed manufacturing firms in Nigeria from 2015 to 2024. The population consists of all the 67 manufacturing firms listed on the Nigerian Exchange (NGX) Group that cuts across 7 sectors which include oil and gas, conglomerates, agriculture, consumable goods, industrial goods, healthcare and natural resources. Given the stratified sector, twenty-three (23) listed firms which represent 30% of the population were proportionally selected by ensuring that each sub-sector have equal chance of being represented in proportion of their sizes. While the data were regressed, the study employed a random regression model in arriving at the findings. The study findings reveal that board size is negative and insignificant on financial performance. However, both board composition and audit committee size were positive on financial performance, though audit committee size was insignificant. Therefore, the study recommends that companies should prioritize Board Composition by ensuring that their boards consist of a significant proportion of independent directors. Independent directors can provide better oversight, reduce conflicts of interest, and bring diverse perspectives to strategic decision-making, which can ultimately improve financial performance.

Suggested Citation

  • Adedipe Oluwaseyi Ayodele & Olusanya Joseph Olugbenga, 2026. "The Role of Corporate Governance, Internal Control System on Firms’ Financial Performance," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(2), pages 6933-6944, February.
    • Handle: RePEc:bcp:journl:v:10:y:2026:i:2:p:6933-6944
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    References listed on IDEAS

    as
    1. Naser Abdelkarim & Khaled Zuriqi, 2020. "Corporate Governance and Earnings Management: Evidence from Listed Firms at Palestine Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(2), pages 200-217, February.
    2. Faozi A. Almaqtari & Mohd. Shamim & Hamood Mohd. Al-Hattami & Saleem Ahmed Aqlan, 2020. "Corporate governance in India and some selected Gulf countries," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 12(2), pages 165-185.
    3. Iqbal, Sana & Nawaz, Ahmad & Ehsan, Sadaf, 2019. "Financial performance and corporate governance in microfinance: Evidence from Asia," Journal of Asian Economics, Elsevier, vol. 60(C), pages 1-13.
    4. Naser Abdelkarim & Khaled Zuriqi, 2020. "Corporate Governance and Earnings Management: Evidence from Listed Firms at Palestine Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(2), pages 200-217.
    Full references (including those not matched with items on IDEAS)

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