CEOs Removal and Bailed Out Banks in Nigeria: Does Absence of Good Corporate Governance Practices Responsible?

The recent financial crisis in the Nigerian banking sector which has been adduced to the abuse of corporate governance practices have been identified as one of the factors that led to the removal of some CEOs. Therefore, this study examined the impact of corporate governance on the financial performance of bailed-out banks in Nigeria. The corporate governance variables include: board size, CEO duality, non-executive directors in audit committee, percentage of women on the board and board independence while return on assets was used to measure financial performance. Data were collected from the annual reports of the six bailed-out banks in Nigeria from 2003 - 2009. The data were analysed using the Ordinary Least Square (OLS). The results showed that there was no significant positive relationship between audit committee, board size, board independence and return on assets. It was also established that though the removal of the CEOs could have a political undertone (outside the scope of this study), the CEOs and the management of the affected banks flagrantly flayed some provisions in the SEC Code, especially in terms of compositions. It is, therefore, recommended that banks should be made to adhere strictly to the existing code of corporate governance for the provisions (especially in terms of composition) to have a maximum and significant impact on the firm financial performance.