Page 3175
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Corporate Governance, Corruption and Financial Performance of
Listed Fast Moving Consumer Goods (FMCG) Companies in Nigeria.
Yekeen, Sikiru Olukayode
1
,Olusola James Oladejo
2
1
Cresecent University Abeokuta, Nigeria.
2
Department of Management & Accounting, Lead City University, Ibadan, Nigeria.
DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000255
Received: 08 October 2025; Accepted: 14 October 2025; Published: 10 November 2025
ABSTRACT
This study explores governance challenges and corruption dynamics within Nigeria's Fast Moving Consumer
Goods (FMCG) sector. It investigates the corporate governance, corruption, and the financial performance of
listed FMCG firms in Nigeria. It employed an ex-post facto research design to analyze historical data on
corporate governance and financial performance. The population comprised of 21 listed FMCG companies in
Nigeria and using purposive sampling, 17 were selected ensuring relevant data from 2014 to 2023. Secondary
data were sourced from annual reports. Data analysis involved descriptive statistics to summarize central
tendencies, variability, and dispersion, a correlation matrix to assess relationships between variables. Ordinary
Least Squares regression was used to estimate relationships and test hypotheses using E-VIEW software. The
study finds that corruption significantly shapes corporate governance, positively affecting board independence
(β = 0.190446, p = 0.0000), gender diversity (β = 0.130695, p = 0.0000), and executive compensation (β =
0.104154, p = 0.0000). Furthermore, corruption moderates the relationship between governance and financial
performance, enhancing the positive effect of board independence on ROA but amplifying inefficiencies of
larger boards. Corruption positively impacts ROA (β = 28.16272, p = 0.0000) but negatively affects EPS (β = -
1570.961, p = 0.0000). The study concludes that corporate governance and corruption significantly influence
financial performance in Nigerian FMCG companies. Corruption moderates these relationships, amplifying the
need for governance vigilance. It is recommended that companies enhance board diversity and align executive
compensation with performance goals while adopting anti-corruption measures to ensure sustainable financial
outcomes and robust governance practices.
Keywords: Corporate Governance, Corruption, Financial Performance, Executive Compensation, Board Gender
Diversity.
INTRODUCTION
The fast-moving consumer goods sector, which includes frequently purchased and consumed products, is vital
to Nigeria's economy. Companies in this sector are expected to adhere to high standards of corporate governance
to enhance their financial performance. In Nigeria, despite the establishment of corporate governance
frameworks, the expected improvements in financial performance, particularly in this sector, have not
materialized. This raises concerns about the efficacy of corporate governance mechanisms and the potential
impact of corruption on their implementation as corruption continue to exist in a significant number of businesses
despite the existence of governance codes, regulatory organisations and compliance agencies. In recent years,
Nigeria has made strides in strengthening corporate governance. For instance, the introduction of the Nigerian
Code of Corporate Governance (NCCG) 2018 by the Financial Reporting Council of Nigeria (FRCN) aimed to
enhance corporate governance practices across all sectors. This code emphasizes board independence, risk
management, and accountability. Despite these efforts, the enforcement of corporate governance standards
remains weak due to regulatory inefficiencies and a lack of political will.
Page 3176
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Corruption is a significant issue in Nigeria; it is endemic, permeating various sectors, including corporate
governance (Timipere, Peter & Johnny, 2020). It manifests in several ways as bribery and kickbacks, nepotism
and cronyism, and regulatory capture. Therefore, the influence of corruption level on both corporate governance
and financial performance is an issue of concern in relation to the Fast-Moving Consumer Goods (FMCG)
companies in Nigeria, as the effects of corruption are gauged to be more severe and deep in the country (Ojeka
et al, 2019).
Given the pervasive nature of corruption, it is plausible that the human behavioral factor plays a significant role;
as sturdy systems are ineffectual if they are run by individuals who lack integrity, and override even a well-
designed mechanism (Rashid et al, 2022). This situation creates a paradox where corporate governance
mechanisms exist in theory but fail in practice due to corrupt practices. Thus, corrupt practices can compromise
the independence and effectiveness of the board (Adedeji & Olajide, 2021). Directors may prioritize personal
gain over shareholder interests, leading to poor decision-making and financial mismanagement. Also, corruption
undermines transparency; financial statements may be manipulated to hide malpractices, and accountability
mechanisms may be circumvented. Likewise, investors and other stakeholders lose confidence in the company’s
governance, leading to reduced investments and higher capital costs. Therefore, (Rooly, 2021) and (Ayunitha et
al, 2020) opined that agency conflicts and attendant agency costs will occur as a result of these conflicts or
interest misalignments between directors and owners. Companies operating in corruption-sensitive environment
usually face higher agency costs (Donadelli et al, 2014).
In sum, the relationship between corporate governance, corruption, and financial performance in Nigeria's
FMCG sector is complex and intertwined. Despite the presence of corporate governance frameworks, their
effectiveness is hampered by corruption. Since corporate governance plays a major role in shaping an
organization's financial success, it is imperative to address the underlying corruption concerns that undermine it
in order to improve financial performance (Boateng et al, 2021) and (Ololade, 2021). This requires a concerted
effort from regulatory bodies, corporate entities, and civil society to strengthen governance practices, enforce
anti-corruption measures, and build a culture of integrity and accountability. Only then can the potential benefits
of robust corporate governance be fully realized, leading to improved financial performance in the sector.
Statement of the Problem
The performance of the Fast-Moving Consumer Goods (FMCG) sector is crucial to the global economy, as high-
performing firms significantly contribute to employment, consumer welfare, and economic stability. However,
many companies still underperform, and some even collapse and the most widely recognised root cause is poor
ethical and corporate governance
(Oshatimi et al, 2022) and (Boateng et al, 2021). In Nigeria, the FMCG sector
like their counterparts in other emerging economies, strives for financial resilience, operational efficiency, and
shareholder value. Yet, achieving sustained optimal performance remains a significant challenge especially in a
corrupt environment (Onakoya et al, 2012) and (Joshua et al, 2019).
The levels of corruption continue to be a long-standing concern which undermines the confidence of investors,
hampers economic growth, and obstructs FMCG sector’s potential. In 2023, Transparency International
Corruption Perceptions Index ranked Nigeria as 145 least corrupt nation out of 180 countries, based on the
pervasiveness of the corrupt practices in the country (Transparency International, 2023). The presence of
unethical practices undermines trust, discourages investment, and ultimately impairs financial performance
(Crane et al, 2016). Therefore, to enhance financial performance, it is necessary to address the issues of
corruption that undermine corporate governance in Nigeria.
First, it was observed that very little empirical studies have been carried out to examine the effect of corruption
on both corporate governance and financial performance in the Nigerian context. Most studies contributed to
corruption and performance literature in Nigeria without examining the combined effect of corruption on both
corporate governance and performance of the firms (Ojeka et al, 2019) and (Timipere et al, 2020). Secondly,
another contextual gap is the fact that previous studies on corporate governance and financial performance in
Nigeria do not focus considerable attention on Fast Moving Consumer Goods. More attention has been focused
on banks (Ojeka et al, 2019) and (Oshatimi et al, 2022). In addition, research on corruption and company
Page 3177
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
performance is concentrated in areas outside of Nigeria there is dearth of empirical data from Nigeria where the
corruption menace is growing at higher proportion (Mohammed, 2021). Consequently, this study fills these gaps
by providing more empirical evidence for the case of Nigerian Fast Moving Consumer Goods sector as it
examined the nexus between corporate governance, corruption levels and financial performance of FMCG
companies in Nigeria. The research would be beneficial to shareholders and other stakeholders, including senior
management, managers, investors, financial analyst, policy makers, regulatory bodies in Nigeria, such as the
Financial Reporting Council of Nigeria (FRCN), as well as the academic community.
Objectives of the Study
The study investigates the relationship between Corporate Governance, Corruption Level and Financial
Performance of Listed Fast Moving Consumer Goods (FMCG) companies in Nigeria. The specific objectives
are to:
1. investigate the impact of corruption level on corporate governance within Fast Moving Consumer Goods
(FMCG) companies in Nigeria.
2. assess the extent to which corruption level influenced the relationship between corporate governance and
financial performance in Fast Moving Consumer Goods (FMCG) companies in Nigeria.
Research Questions
The following questions were answered in the study:
1. how does corruption level influence corporate governance in Fast Moving Consumer Goods (FMCG)
companies in Nigeria?
2. to what extent has the corruption level influenced the relationship between corporate governance and
financial performance in Fast Moving Consumer Goods (FMCG) companies in Nigeria?
LITERATURE REVIEW
Conceptual Review
Financial Performance
Financial performance serves as a gauge for how well the objectives of an organization are being met (Haruna
et al, 2019). A firm's financial performance is correlated with how effectively it uses its resources to carry out
its core business operations and produce future revenues (Ayandele & Oyelade, 2019). It also refers to the state
of a firm's finances generally throughout a specific time frame. Profitability is frequently used to measure
business success since it evaluates how well current assets, such as machinery and equipment, are converted into
profits (Tabassum & Singh, 2020). Therefore, financial performance refers to the ability of listed fast-moving
consumer goods (FMCG) companies in Nigeria to achieve its strategic goals and objectives, including financial
performance measures such as return on assets (ROA), return on capital employed (ROCE), and earnings per
share (EPS) which are used as dependent variables.
Return on Assets (ROA): It is a metric used by managers and financial analysts to evaluate how well an
organisation uses its resources to make a profit. It is a financial ratio that indicates how profitable a company is
in relation to its total assets, and it is an essential factor in determining a firm's profitability
(Osemene Olayemi,
2022). Return on assets measures how much a firm's assets are worth in relation to its profits over a certain time
frame. Therefore, it It refers to performance measure that indicates the profitability of listed fast-moving
consumer goods (FMCG) companies in Nigeria by measuring the net income generated by its assets.
Return on Capital Employed (ROCE): Refers to a financial performance measure that indicates the
profitability of listed fast-moving consumer goods (FMCG) companies in Nigeria by measuring the return
generated by the capital invested in the business.
Page 3178
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
Earnings Per Share (EPS): This refers to the amount of net income allocated to each existing share of ordinary
stock (Haruna et al, 2019). Since the organisation is earning more money for each share of its outstanding stock,
a higher EPS often signifies more financial success. It is a financial performance measure that indicates the
profitability of companies by dividing the net income by the total number of shares outstanding.
Corporate Governance
The structures, values, and procedures that a firm is managed and guided by are referred to as its corporate
governance (Joshua, Efiong & Imong, 2019). In order to ensure that an organisation is operated ethically and
transparently, and that its management acts in the best interests of its shareholders and stakeholders, good
corporate governance is crucial. Corporate governance is a collection of interlocking rules that firms,
shareholders, and management use to control their conduct (Chukwuemeka et al, 2015). Therefore, it refers to
the formal system of rules, practices, and processes by which companies is directed and controlled.
Board Independence: The board of directors is the most crucial tool for managing management. The percentage
of independent non-executive directors in relation to the total number of directors is known as the board's
independence. It is suggested that boards with more non-executive members will better supervise managers'
opportunistic behavior and safeguard the interests of shareholders than boards with dependent members. The
importance of independence in ensuring board effectiveness through the directors' oversight and strategic
functions cannot be overemphasized
(Merendino & Melville, 2019).
Board Size: The board's size, is a key facet of corporate governance, can influence its ability to function
effectively. The minimum and maximum board sizes are typically set by corporate governance regulations or
stock exchange listing standards. These regulations aim to establish a suitable board size that fosters
effectiveness while avoiding cumbersomeness. It refers to the total number of directors on the board of listed
companies (Handriani & Robiyanto, 2019).
Board Gender Diversity: In recent times, there has been a growing advocacy for more female’s representation
in a board. Women executives make decisions in an organization with more caution than males do. Boards with
a significant proportion of women have access to a variety of viewpoints and additional talents that might not be
available on all-male boards. Also, board diversity encourages more effective monitoring and problem-solving.
Gender diversity will be used in this study as a stand-in for board diversity. It refers to the proportion of female
directors on the board (Adegboyegun & Igbekoyi, 2022).
Executive Compensation: It is the financial payments and nonfinancial benefits that top executives receive
from the organisations they oversee. It is all forms of financial returns and perquisites received directly or
indirectly as a result of an executive's association with the firm. Characterize executive compensation as a
combination of fixed and variable elements strategically structured to attract, retain, and motivate top executives
with the aim of enhancing firm performance and maximizing shareholder value (Al Farooque, Buachoom &
Hoang, 2019). Therefore, it refers to the total compensation, including salary, bonuses, and stock options, paid
to the top executives of listed fast-moving consumer goods (FMCG) companies in Nigeria.
Corruption: It refers to abuse of entrusted power for private gain. Corruption erodes trust, weakens democracy,
hampers economic development and further exacerbates inequality, poverty, social division and the
environmental crisis. Corruption plagues many emerging nations. Research indicates that corruption hinders
economic growth at the national level, but few researches have examined its impact on individual enterprises
(Boateng et al, 2021).
Transparency International Corruption Perceptions Index was used as the measure of pervasiveness of corrupt
practices in the study.
THEORETICAL REVIEW
Agency Theory
According to Jensen & Meckling (1976), agency theory explains the relationship that arises between the principal
party who hires another party or agent to perform a service and the principal has the power to make decisions
Page 3179
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
with the agent. This theory is the primary theoretical framework for the study. The agency theory asserts that
multiple stakeholders, including shareholders and management, may have conflicts of interest within a corporate
structure, necessitating the creation of procedures to align these interests and assure optimal performance
(Bernhold & Wiesweg, 2021).
Empirical Review
Ojeka et al (2019) examined the effect of corruption perception and institutional quality on the performance of
firms using extracted data for 135 listed companies in Nigeria between 2013 and 2017. The Transparency
International Corruption Perception Index and World Bank Governance Indicators were used using the
Generalized Method of Moment (GMM) for the analysis. The study finds that corruption is negatively related to
the market value (TobinQ) and accounting value performance (ROA) while institutional quality is negatively
related to both. The results suggest that corruption and institutional quality weaken the market and accounting
performance of firms in Nigeria. It recommends that Nigeria needs more effective and strong mechanisms to
curtail corruption practices and weak institutional quality.
Boateng et al (2021) using institutional theory, examine how corporate governance affects corruption. The
influences of national culture and governance on corruption are also examined and the basic findings from 149
countries suggest that corporate governance practices reduce corruption. Three cultural dimensions power
distance, individualism, and indulgence - moderate the relationship between corporate governance and
corruption. The findings imply that national culture is more influential than corporate governance in explaining
corruption in societies.
Mayowa et al, (2020) examine the influence of corporate governance on firm performance with the accounting
measure in selected consumer goods companies from 2014-2018. The dependent variables were the return on
sales, profit margin and operating cash flow while the independent variables were board size, board
independence and audit committee. The study revealed that board size significantly has positive impact on return
on sales. Board size and board independence has positive significant influence on profit margin, while negatively
influencing operating cash flow. The research recommended that the firm must be aware about its board size and
should ensure the board is controlled with a low-cost reduction rationality to prevent it from causing any negative
influence on firm performance.
Adedeji et al, (2021) assess the effect of corporate governance on firm performance of selected Nigerian banks
using 5 years regression analysis from 2014 – 2018 employing descriptive and Correlation analysis to identify
the relationship. It is found that 86.78% of the stock performance of banks was accounted for by the explanatory
variables. It implies that corporate governance intervention should be directed towards the stock performance of
deposit money banks as the stock performance is a measure of the wealth of shareholders. Also, the Central bank
of Nigeria and other regulatory authorities should ensure mandatory and strict compliance with the code of
corporate governance by firms.
METHODOLOGY
This study employs an ex-post facto research design to analyze historical data on corporate governance and
financial performance, examining the influence of pre-existing independent variables (e.g., board independence,
board size, executive compensation, board gender diversity) on dependent variables (e.g., Return on Assets,
Return on Capital Employed, Earning Per Share) without direct manipulation. This design is justified as it suits
fact-finding inquiries, enabling the exploration of relationships by observing existing conditions and tracing
plausible contributing factors over time. The study's population comprises all 21 listed Fast Moving Consumer
Goods companies in Nigeria listed on the Nigerian Exchange Group (NGX) as of December 31, 2023 for
secondary data. Purposive sampling was used to select 17 listed Fast Moving Consumer Goods companies in
Nigeria. Companies were excluded if their financial statements or annual reports were unavailable, unsuitable,
or inaccessible.
Page 3180
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
RESULTS AND DISCUSSION OF FINDINGS
Table 1- Descriptive statistic of the variables
ROA
ROCE
EPS
Board
Size
Board Gender
Diversity
Executive
Compensation
Corruption
Level
Mean
0.089
0.270
0.960
2.282
0.523
11.79
0.259
Median
0.061
0.146
0.756
2.302
0.693
12.14
0.260
Maximum
0.425
2.894
4.663
2.708
1.386
15.23
0.280
Minimum
-0.133
-0.270
-2.995
1.386
0.000
0.000
0.240
Std. Dev.
0.089
0.425
1.640
0.263
0.458
2.561
0.013
Skewness
1.134
3.652
0.249
-0.796
0.098
-2.784
-0.231
Kurtosis
4.783
19.10
2.598
4.046
1.735
14.00
1.829
Jarque-Bera
46.50
1745.3
2.286
20.27
9.148
849.2
8.838
Probability
0.000
0.000
0.318
0.000
0.010
0.000
0.012
Sum
11.95
36.27
128.7
305.9
70.20
1580.1
34.80
Sum Sq. Dev.
1.062
24.06
358.0
9.234
27.96
872.3
0.022
Observations
134
134
134
134
134
134
134
Table 1 provides the descriptive statistics for the study variables, summarizing key measures of central tendency,
variability, and distributional characteristics for the observations. These provide insights into the overall data
distribution and form the foundation for further analyses.
Research Question 1 - How does corruption level influence corporate governance in Fast Moving Consumer
Goods (FMCG) companies in Nigeria?
Table 2 Effect of Corruption level on Corporate Governance within Fast Moving Consumer Goods (FMCG)
companies in Nigeria.
Metric
Board
Independence
Board Size
Board Gender
Diversity
Executive
Compensation
Coefficient
0.190446
0.001646
0.130695
0.104154
Std. Error
0.022473
0.015896
0.011582
0.000675
t-Statistic
8.474317
0.103577
11.28432
154.3622
Prob.
0.0000
0.9177
0.0000
0.0000
R-squared
-107.604497
-371.687797
-103.485191
-1.284664
Adjusted R-squared
-107.604497
-421.971071
-103.485191
-1.284664
S.E. of Regression
0.137458
0.271325
0.134885
0.020016
Sum Squared Resid
2.871986
9.275785
2.437988
0.055687
Long-run Variance
0.019884
0.000176
0.020654
0.000389
Mean Dependent Var
0.257778
0.257778
0.257778
0.257571
S.D. Dependent Var
0.013190
0.013193
0.013196
0.013242
Table 2 presents the analysis of the impact of corruption levels on corporate governance metrics within Fast-
Moving Consumer Goods (FMCG) companies in Nigeria. The table provides coefficients, standard errors, t-
statistics, and probabilities to evaluate the significance and direction of these relationships. Board independence
is positively and significantly influenced by corruption levels, with a coefficient of 0.190446 (p = 0.0000). This
finding suggests that as corruption increases, there may be a greater emphasis on maintaining independent
boards, potentially as a mechanism to signal integrity and mitigate reputational risks. The high t-statistic
(8.474317) supports the robustness of this relationship. Board size shows no significant relationship with
corruption levels, as indicated by a near-zero coefficient (0.001646) and a high p-value (p = 0.9177). This implies
that board size remains unaffected by variations in corruption levels, suggesting that companies may prioritize
other factors over corruption when determining board composition. Board gender diversity demonstrates a
significant positive relationship with corruption levels, with a coefficient of 0.130695 (p = 0.0000). This finding
Page 3181
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
indicates that higher corruption levels are associated with increased gender diversity on boards. This may reflect
efforts to enhance governance quality and stakeholder trust by incorporating diverse perspectives, particularly
in environments where corruption poses challenges to corporate legitimacy. Executive compensation is also
significantly and positively related to corruption levels, as shown by a coefficient of 0.104154 (p = 0.0000) and
an exceptionally high t-statistic (154.36). This suggests that executive pay may increase in response to higher
corruption levels, possibly as a form of risk premium or as a means to align executives’ incentives with firm
performance under challenging conditions. The findings highlight that corruption levels significantly affect
certain aspects of corporate governance, particularly board independence, gender diversity, and executive
compensation. These results suggest that in high-corruption environments, governance structures adapt in ways
that may reflect attempts to counterbalance governance risks or enhance organizational resilience.
Research Question 2 - To what extent has the corruption level influenced the relationship between corporate
governance and financial performance in Fast Moving Consumer Goods (FMCG) companies in Nigeria?
Table 3 - Corruption Level Has effect on the Relationship between Corporate Governance and Financial
Performance in Fast Moving Consumer Goods (FMCG) Companies in Nigeria.
Variable
ROA Coefficient
(Prob.)
ROCE Coefficient
(Prob.)
EPS Coefficient
(Prob.)
Board Independence
-24.08942 (0.0000)
-65.22805 (0.0455)
-3735.123 (0.0000)
Board Size
27.60966 (0.0000)
71.28438 (0.0375)
3724.187 (0.0000)
Board Gender Diversity
1.050593 (0.0000)
-11.02660 (0.0064)
-117.1480 (0.0000)
Executive Compensation
-6.285729 (0.0000)
-
-
Corruption Level
28.16272 (0.0000)
312.4045 (0.2250)
-1570.961 (0.0000)
Board Independence* Corruption Level
97.27214 (0.0000)
219.0999 (0.0376)
15032.97 (0.0000)
Board Size *Corruption Level
-110.7548 (0.0000)
-251.1512 (0.0457)
-14606.65 (0.0000)
Board Gender Diversity*Corruption Level
-4.411137 (0.0000)
40.92689 (0.0070)
433.3893 (0.0000)
Executive Compensation*Corruption Level
2.798560 (0.0000)
-9.421545 (0.0204)
69.39266 (0.0000)
Metric
Return on Assets
Return on Capital Employed
EPS
R-squared
-77.795452
-10152.536338
-2024.384070
Adjusted R-squared
-89.468853
-22336.779945
-3796.595131
S.E. of Regression
1.157693
190.3445
134.7205
Sum Squared Resid
72.37363
724620.9
145196.8
Mean Dependent Var
0.046909
0.268266
2.040889
S.D. Dependent Var
0.121715
1.273563
2.186146
Long-run Variance
3.03E-12
0.016247
6.62E-15
Table 4 analyzes how corruption levels have influenced the relationship between corporate governance and
financial performance in FMCG companies in Nigeria. The dependent variables examined include return on
assets (ROA), return on capital employed (ROCE), and earnings per share (EPS). The table shows that Board
independence exhibits a negative and significant influence on all three-performance metrics. Specifically, its
coefficients for ROA (-24.08942, p = 0.0000), ROCE (-65.22805, p = 0.0455), and EPS (-3735.123, p = 0.0000)
indicate that higher board independence is associated with a decline in performance. However, the interaction
between board independence and corruption level demonstrates a significant positive effect on ROA (97.27214,
p = 0.0000), ROCE (219.0999, p = 0.0376), and EPS (15032.97, p = 0.0000). This suggests that while board
independence alone negatively impacts performance, its influence becomes favorable in the context of high
corruption, potentially due to increased governance vigilance. Board size shows a significant positive impact on
ROA (27.60966, p = 0.0000), ROCE (71.28438, p = 0.0375), and EPS (3724.187, p = 0.0000). However, the
interaction of board size with corruption level reveals a significant negative effect on ROA (-110.7548, p =
0.0000), ROCE (-251.1512, p = 0.0457), and EPS (-14606.65, p = 0.0000). This indicates that while larger
Page 3182
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
boards positively influence performance, corruption moderates this relationship, potentially by amplifying
inefficiencies or coordination challenges within larger boards. Board gender diversity significantly improves
ROA (1.050593, p = 0.0000) but negatively affects ROCE (-11.02660, p = 0.0064) and EPS (-117.1480, p =
0.0000). The interaction term between board gender diversity and corruption shows mixed effects: a negative
influence on ROA (-4.411137, p = 0.0000) and positive impacts on ROCE (40.92689, p = 0.0070) and EPS
(433.3893, p = 0.0000). These findings suggest that gender diversity’s role in performance varies based on the
corruption context. Executive compensation demonstrates a negative and significant impact on ROA (-6.285729,
p = 0.0000), with its interaction with corruption showing a positive influence (2.798560, p = 0.0000). This
implies that while higher executive pay may initially reduce firm performance, its alignment with performance
may improve under conditions of higher corruption, potentially incentivising executives to mitigate corruption
risks effectively. Corruption level alone has a significant positive impact on ROA (28.16272, p = 0.0000) but a
negative effect on EPS (-1570.961, p = 0.0000), with no significant effect on ROCE. This underscores
corruption's complex and varied influence on different performance dimensions, acting as a context-specific
moderator in the corporate governance-performance nexus.
CONCLUSION
The study concludes that corruption levels significantly have effect on most corporate governance metrics,
except board size. Board independence, board gender diversity, and executive compensation exhibit positive and
significant relationships with corruption levels, suggesting that firms may strengthen these governance
mechanisms in high-corruption environments to signal integrity, enhance trust, or incentivise performance. Also,
corruption significantly moderates the effect of corporate governance on financial performance. These findings
emphasize the complex role of corruption in shaping governance outcomes.
RECOMMENDATIONS
Based on the findings, the study recommended that:
1. companies should promote board independence and diversity to signal integrity and build stakeholder
trust. Independent boards are more effective in corrupt societies.
2. companies should maintain stable board sizes to reduce inefficiencies and coordination challenges
that can compromise decision-making effectiveness.
3. executive compensation should be aligned with governance goals to reward ethical leadership and
sustainable performance outcomes.
REFERENCES
1. Adedeji, B. S., Ong, T. S., Uzir, M. U. H., & Abdul Hamid, A. B. (2020). Corporate Governance and
Performance of Medium-Sized Firms in Nigeria: Does Sustainability Initiative Matter? Corporate
Governance: The International Journal of Business in Society, 20(3), 401–427.
2. Adedeji, E. A., & Olajide, A. B. (2021). Impact of Corporate Governance on the Performance of Selected
Banks in Nigeria. The Journal of Accounting and Management, 11(1), 189–206.
3. Adegboyegun, A. E., & Igbekoyi, O. E. (2022). Board Diversity and Financial Performance of Listed
Manufacturing Firms in Nigeria. Saudi Journal of Business and Management Studies, 7(2), 50–60.
4. Al Farooque, O., Buachoom, W., & Hoang, N. (2019). Interactive Effects of Executive Compensation,
Firm Performance, and Corporate Governance: Evidence from an Asian Market. Asia Pacific Journal of
Management, 36, 1111–1164.
5. Alashe, A. K., Raheed, L. O., & Bello, A. O. (2021). The Board Structure and Financial Performance of
Selected Listed Consumers’ Goods Firms: Evidence from Nigeria. International Journal of Economics
and Financial Management, 6(1).
6. Al-Homaidi, E. A., Almaqtari, F. A., Ahmad, A., & Tabash, M. I. (2019). Impact of Corporate
Governance Mechanisms on Financial Performance of Hotel Companies: Empirical Evidence from India.
African Journal of Hospitality, Tourism and Leisure, 8(2), 1–21.
7. Ayandele, O., Amaihian, O. G., & Oyelade, J. A. (2019). Board Structure and Financial Performance of
Listed Manufacturing Firms in Nigeria. Journal of Accounting and Management, 9(1), 35–50.
Page 3183
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
8. Ayinitha, A., Sulastri, H. W., Fauzi, M. I., Sakti, M. A. P. & Nugraha, N. M. (2020). Does the Good
Corporate Governance Approach Affect Agency Cost? Solid State Technology, 63(4).
9. Bernhold, T., & Wiesweg, N. (2021). Principal-Agent Theory: Perspectives and Practices for Effective
Workplace Solutions. In R. Finch (Ed.), A handbook of management theories and models for office
environments and services (pp. 117–128). Routledge.
10. Boateng, A., Wang, Y., Ntim, C., & Glaister, K. (2021). National Culture, Corporate Governance and
Corruption: A Cross-Country Analysis. International Journal of Finance & Economics, 26, 3852–3874.
11. Chukwuemeka, E., Iloanya, K. O., & Okechukwu, E. U. (2015). The Dwindling Performance of Public
Organizations in Nigeria: The Role of Corporate Governance. NG-Journal of Social Development, 5(1),
53–64.
12. Crane, A., Matten, D., Glozer, & Spence, L. J. (2016). Business ethics: Managing Corporate Citizenship
and Sustainability in the Age of Globalization (4th ed.). Oxford University Press.
13. Donadelli, M., Fasan, M., & Sveva, B. (2014). The Agency Problem, Financial Performance and
Corruption: Country, Industry and Firm Level Perspectives. European Management Review, 11, 259–
272.
14. Handriani, E., & Robiyanto, R. (2019). Institutional Ownership, Independent Board, Board Size, and
Firm Performance: Evidence from Indonesia. Contaduría y Administración, 64(3).
15. Haruna, R. A., Jacob, A., Emmanuel, O. G., & Abdulkareem, J. K. (2019). Effect of Corporate
Governance Mechanisms on Financial Performance of Listed Insurance Companies in Nigeria. Islamic
University Multidisciplinary Journal, 6(4), 1–11.
16. Joshua, U. M., Efiong, E. J., & Imong, N. R. (2019). Effect of Corporate Governance on Financial
Performance of Listed Deposit Money Banks in Nigeria. Global Journal of Social Sciences, 18, 107–
118.
17. Mayowa, E. A., Olusola, E. O., & Olaiya, K. (2021). Corporate Governance and Firm Performance of
Listed Consumer Goods Companies in Nigeria. Asian Journal of Economics, Business and Accounting,
21(15), 58–70.
18. Merendino, A., & Melville, R. (2019). The Board of Directors and Firm Performance: Empirical
Evidence from Listed Companies. Corporate Governance: The International Journal of Business in
Society, 19(3), 508–551.
19. Mohammed, A. (2021). A Brief Review of Corporate Governance Structure and Corporate Profitability
in Developed and Developing Economy: A review. International Journal of Business and Management
Invention (IJBMI), 10(11, Ser. II), 42–46.
20. Mohsni, S., Otchere, I., & Shahriar, S. (2021). Board Gender Diversity, Firm Performance and Risk-
Taking in Developing Countries: The Moderating Effect of Culture. Journal of International Financial
Markets, Institutions and Money, 73, 101360.
21. Ojeka, S. A., Adegboye, K., Adegboye, O., Umukoro, O., Dahunsi, O., & Ofori, E. (2019). Corruption
Perception, Institutional Quality and Performance Of Listed Companies In Nigeria. Heliyon, 5(10).
22. Ololade, E. B. (2021). Impact of Corporate Governance on Financial Performance of Consumer Goods
Firms in Nigeria. Bingham International Journal of Accounting and Finance (BIJAF), 2(1), 332.
23. Onakoya, A., Ikenna, D., & Fasanya, I. (2012). Corporate Governance and Bank Performance: A Pooled
Study of Selected Banks in Nigeria. European Scientific Journal, 8(28), 155.
24. Osemene, O. A., & Olayemi, I. J. (2022). The Impact of Corporate Governance Mechanisms on the
Financial Performance of Banks in Nigeria. Journal of Economic and Sustainable Development, 13(3),
66–75.
25. Oshatimi, O. O., Alabadan, D. N., Olaniyi, R. B., & Bamisaye, T. O. (2022). Corporate Governance and
Financial Performance of Quoted Cross-Border Banks in Nigeria. Fuoye Journal of Accounting and
Management, 5(2), 236–263.
26. Osho, A. E., & Ogodor, B. N. (2018). The Effect of Corporate Governance Culture of Banks on Financial
Performance in Nigeria. Research Journal of Finance and Accounting, 9(8), 45–56.
27. Ozili, P. K. (2020). Corporate Governance Research in Nigeria: A Review. SN Business & Economics,
1(1), 17. https://doi.org/10.1007/s43546-020-00003-1
28. Rashid, M. A., Al-Mamun, A., Roudaki, H., & Yasser, Q. R. (2022). An Overview of Corporate Fraud
and Its Prevention Approach. Australasian Accounting, Business and Finance Journal, 16(1), 101–118.
Page 3184
www.rsisinternational.org
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
29. Rooly, M. R. (2021). Impact of Board Diversity on Agency Costs in the Context of Agency Theory
Approach: Evidence from Listed Companies in Sri Lanka. Indian Journal of Corporate Governance,
14(2), 133–153.
30. Tabassum, N., & Singh, S. (2020). Corporate Governance and Organisational Performance: The impact
of board structure. Springer Nature.
31. Timipere, E., Peter, E., & Johnny, N. (2020). Effect of Corruption on Corporate Financial Performance:
A Study of the Banking Industry in Nigeria (1996–2014). International Journal of Latest Research in
Humanities and Social Science, 1(8), 96–119.
32. Transparency International. (2023). Corruption perceptions index 2023.
https://www.transparency.org/en/cpi/2023