Corporate governance and profitability: An application of the Agency Theory

Several empirical studies have been conducted on the effects of corporate governance mechanisms on profitability. Some found significant positive associations, while others found significant negative associations, and still others have failed to find any significance at all. The majority of the work has been done in developed economies, and very little is known about emerging economies. In this regard, this piece interrogates the impact of corporation governance on bank return on equity in Corporate Nigeria. The paper examines 130 panel datasets of listed deposit money banks from 2010 to 2019 and found empirical evidence supporting negative significant effect of board ownership and audit committee size and positive insignificant effect of board independence and gender on return on equity. The effect of corporate age (as control variable) on profitability, on the other hand, was found to be negatively significant as well.