Nigerian Journal of Banking and Financial Issues (NJBFI)

DO CORPORATE GOVERNANCE MECHANISMS IMPROVE THE PERFORMANCE OF NIGERIAN FMCG FIRMS? PANEL EVIDENCE FROM 2015–2024

Abstract

This study examined whether corporate governance mechanisms improve the performance of Fast-Moving Consumer Goods (FMCG) firms listed on the Nigerian Exchange Group. Anchored on Agency Theory and Stakeholder Theory, the study adopted an ex post facto research design and utilised panel data from ten listed FMCG firms covering the period 2015–2024. Firm performance was proxied by return on assets and return on equity, while corporate governance mechanisms were measured using board size, board gender diversity, board meetings, audit committee size, and board composition. Firm size and leverage were included as control variables. Data were analysed using descriptive statistics, correlation analysis, and panel regression techniques, with fixed and random effects models estimated and the Hausman test guiding model selection. The findings revealed that board size, board meetings, audit committee size, board composition, and board gender diversity exerted positive and statistically significant effects on firm performance, while leverage had a negative effect. Based on these findings, the study recommends strengthening board effectiveness, enhancing gender diversity, improving audit committee competence, and adopting prudent leverage policies to improve firm performance. The study concludes that effective and inclusive corporate governance practices are critical for enhancing the performance of Nigerian FMCG firms.