Corporate Governance Structure and Financial Performance of Listed Pharmaceutical Firms in Nigeria

Abstract

This study evaluated corporate governance structure and financial performance of listed pharmaceutical firms on the Nigeria Stock Exchange. The study objective was to investigate the relationship between corporate governance structure Board size and Audit committee) and financial performance (Return on investment) of pharmaceutical firms in Nigeria. The study adopted ex-post facto research design. The study population was eleven (11) listed pharmaceutical firms in the Nigeria Stock Exchange. The sample size was ten (10) of the listed firms drawn through Taro Yamane formula, while the data for the study were retrieved from published financial statements of the pharmaceutical firms listed on the Nigeria Stock Exchange Market between 2002 and 2016. The statistical tool used in the study was the multiple regression analysis to establish the effect of the independent variable on the dependent variable. The analysis of data revealed, among other things, that Board size and Audit committee have positive and significant relationship with return on investment. The study concluded that board composition and Earnings Per Share have no impact on financial performance of listed pharmaceutical firms in Nigeria. However, the study recommends that there should be sustenance of the present board size of the firms, given that it has stronginfluence on the financial performance of the firms. Again, Management of pharmaceutical Firms should ensure that Audit Committees of their firms be strengthened as it plays significant roles in financial performance of their firms.