Corporate Governance Mechanisms and Agency Cost in the Nigerian Banking Sector
The study examines corporate governance and agency cost of Deposit Money Banks (DMBs) listed in the Nigerian Stock Exchange during the period 2012 to 2022. The study is motivated by the dearth of prior empirics on the discourse, consequently impairing policy formulation. The study adopts longitudinal research design, a census of the thirteen DMBs is taken, secondary data source from the audited annual report of the sample DMBs. Using panel estimation technique, the result reveals that: ownership concentration has a positive impact (0.003) which is statistically insignificant (p=0.332) at 5% level; board size has a positive impact (0.004) and it is statistically significant at 10% (p=0.078); board independence has a positive impact (0.010) though not statistically significant at 5% (p=0.832); and managerial ownership has a positive impact (0.003) and it is statistically significant at 1% (p=0.000). The study concludes that variables being positively signed suggests to a large extent non conformity to theoretical expectation. This implies that corporate governance framework does not reduce agency cost in the Nigerian DMBs. The study recommends; block equity holders should be active in ensuring that corporate governance practices are adhered to by managers; non-executive directors should use their status as independent director to improve the board vigilant role.
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