EFFECT OF CORPORATE GOVERNANCE MECHANISM ON FIRM PERFORMANCE OF SELECTED MANUFACTURING FIRMS IN NIGERIA

ABSTRACT Corporate governance is an indispensible tool utilised by management of firm to exercise control over the overall activities of firm to achieve organizational goals, corporate reputation and long term financial sustainability. This study examined the impact of corporate governance on financial performance of listed manufacturing firms in Nigeria for a ten years period spanning 2015-2024. The study twenty manufacturing firms were sampled from a population of forty seven through purposive sampling technique. The study used ex-post facto research design and a panel dataset of ten years were extracted from the published financial statements of the sampled firms. The regression model of the study was analysed by the Ordinary Least Squares robust model estimation technique and the results show that the association between board independence, board size, board diligence and board gender diversity and return on equity yielded positive coefficients with p-value of 0.039,0.000,0.000 and 0.000 respectively. Consequently, corporate governance has positive and significant impact on financial performance of Nigeria manufacturing firms. Therefore, boards of manufacturing firms should priorities sound corporate governance mechanism to achieve long-term financial sustainability. The policy implication of this finding is that the regulators of the manufacturing sector should ensure monitoring of firm corporate governance to ensure its alignment with the issued corporate governance code for the sector. Key words: Corporate Governance, Financial Performance, Board diligence, Return on equity, long-term financial sustainability