Examination of the dynamic interactions among ownership structure, corporate governance, risk management and performance of Nigerian banks

Abstract

This study examined the dynamic interactions among ownership structure, corporate governance, risk management and performance of Nigerian banks. Secondary data were sourced from 20 out of 22 post-consolidation Deposit Money Banks listed on the Nigerian Stock Exchange for a period of seven years from 2005-2011. The data were on Return on Equity (Bank Performance); Capital Adequacy Ratio (Corporate governance); proportion of the board members’ share capital to total bank capital (Ownership structure) and Bank Risk Behaviour (Risk Management Practices). The data were regressed firstly without interaction with ownership structure and later with ownership structure. The results of the analysis showed that without interacting ownership structure with corporate governance and bank risk behaviour, corporate governance has positive and significant effect on bank performance (p < 0.05), but bank risk behaviour has negative but insignificant effect on bank performance (p > 0.05). Ownership structure has positive and significant effect like corporate governance (p < 0.05). However when the ownership structure was interacted with corporate governance and risk behaviour, the results and significance of the variable changed remarkably. The study concluded that good risk management policies and proper ownership structure enhance improved corporate performance.

Keywords: Ownership Structure, Corporate Governance, Risk Management, Performance, Dynamic Relationship