An Empirical Analysis of Corporate Governance and Firm Profitability in Nigeria’s Capital Market

This study investigates the corporate governance mechanisms’ impact on firm profitability in Nigeria’s Capital Market with focus on the most capitalized entities between 2014 and 2023. Profitability was measured by Earnings Per Share (EPS) and board independence, gender diversity, board meeting frequency, institutional investor presence, and committee sizes proxy governance attributes, with Audit quality as a control variable. Using robust pooled regression, results show that board independence, gender diversity, and meeting frequency significantly enhance profitability, highlighting the value of autonomous, inclusive, and active boards. Institutional investor presence, governance nomination and remuneration committee size, and audit quality negatively affect profitability, suggesting short-termism, inefficiencies, or constraints from stringent practices. Statutory audit and risk management committee sizes exert negative but insignificant impacts. With explanatory power of 32.28%, findings emphasize that governance structures strongly influence firm outcomes. The study concludes that effective governance—through improved board composition, optimized committees, and stronger regulatory oversight—remains vital for enhancing profitability and recommends better institutional investor stewardship to strengthen governance quality and financial performance in Nigeria.

Corporate Governance, Profitability, NGX 30.JEL Classification Codes

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