An Appraisal on the Impact of Corporate Governance on the Financial Performance of the NIgerian Banking Sector: A Case Study of Fidelity Bank

Abstract

This study appraised the impact of corporate governance on the financial performance of the Nigerian banking sector using Fidelity Bank as a case study. With the objective to evaluate how the board composition and other committees of the banks affect the bank’s financial performance, ascertain the role of the Central Bank of Nigeria (CBN) as the regulator of the banks in Nigeria and explore the impacts these factors have on the financial prosperity of the bank. The pragmatic philosophical approach was used in this study. The results showed somewhat divergent perspectives on how corporate governance affects the financial success of Nigerian banks. Even though there weren't enough interviews, the research nevertheless outperformed other studies by analysing Fidelity Bank's financial statements and annual reports for the preceding five years, the most recent of which was in 2022. Questions about the effects of corporate governance on the financial performance of Nigerian banks, the impact of the board of directors and other bank committees on financial performance, and the CBN's role as the country's banking regulator were all addressed. Four employees of Fidelity Bank participated in a semi-structured interview to gather pertinent information, which was then analysed and used for more in-depth research. As previously mentioned, the bank's financial statements and annual reports for the previous five years were also examined, and the findings were compared with information from the interview. According to the analysis's findings, good corporate governance policies do influence the bank's financial success. As recommendations, in terms of the practice of corporate governance in Nigerian banks, it was advised that the role and position of external auditors be made available. It was also discovered that other bodies are tasked to regulate the activities of banks in Nigeria and the recommendation was given for those bodies to be unified into one. The CBN was also advised to intensify their regulatory functions. As for recommendations for future studies, it was advised that subsections of financial institutions should be studied without also ignoring market-based financial performance metrics and comparing them with other banks.