CORPORATE GOVERNANCE MECHANISMS AND SHARE PRICES OF QUOTED COMMERCIAL BANKS IN NIGERIA
Abstract
This study investigates the impact of corporate governance mechanisms on the share prices of quoted commercial banks in Nigeria, focusing on the roles of board gender diversity, board size, and independent directors. Using data from 60 observations across five quoted commercial banks in Nigeria employing the Fixed Effects (FE), Random Effects (RE), and Robust (ROBUST) regression models, the study evaluates how these governance variables influence financial performance. The analysis also explores the moderating role of institutional quality in enhancing the effects of corporate governance on share prices. The findings reveal that board size and independent directors significantly impact share prices, with coefficients consistently significant across all models. Specifically, larger boards and a higher proportion of independent directors are associated with higher share prices, underscoring their role in enhancing decision-making, oversight, and investor confidence. Conversely, board gender diversity does not statistically affect share prices, suggesting that other factors may be more crucial in financial performance. The interaction effects with institutional quality highlight that strong institutional frameworks can amplify the positive impacts of independent directors and board size on share prices. However, institutional quality does not significantly moderate the effects of directors' equity ownership or gender diversity. These results suggest practical recommendations for banks, including optimizing board size, prioritizing independent directors, and supporting gender diversity initiatives. Additionally, enhancing institutional quality can further bolster the effectiveness of governance practices. The study underscores the complexity of linking corporate governance to financial outcomes and advocates for continued research to explore these dynamics in greater depth.