2011 Securities and Exchange Commission Code of Corporate Governance and Performance of Deposit Money Banks in Nigeria

Abstract

This paper empirically evaluated the effect of the Nigeria 2011 Securities and Exchange Commission (SEC) Code of Corporate Governance on the performance of Deposit Money Banks (DMBs) in the country. To achieve this aim, yearly secondary data were obtained from 2006 to 2015 from the annual reports and accounts of fourteen (14) DMBs purposely selected for this study. The performance variables of interest in this study were return on asset, return on equity, liquidity, capital adequacy and tangibility. The principal-agency theory forms the theoretical base of this empirical investigation. For the purpose of analysis, the method of estimation adopted includes descriptive statistics, analysis of correlation matrix and the Wilcoxon Sign-Test. Findings from the study reveal that following the implementation of the 2011 SEC code of corporate governance, there was significant difference in the performance indices of banks in Nigeria as compared to their performance prior to the implementation of the codes. It was therefore recommended among others that in line with the provisions of the 2011 SEC code, corporate ethics and values should be aligned with personal ethics especially among board members appointed to every respective board committee. Similarly, strategic and integrated approach should be taken to regularly review the significance of each area of the 2011 SEC codes to enable it guarantee long term significance and relevance to the ever changing business environment of banks in Nigeria.