ASSESSING THE EFFECT OF CORPORATE GOVERNANCE ON PROFITABILITY LEVEL OF SELECTED MONEY DEPOSIT BANKS IN NIGERIA (A STUDY OF WEMA BANK PLC, ADO-EKITI, EKITI STATE)

ABSTRACT The study examines the effect of corporate governance on profitability level of selected money banks in Nigeria using a study of Wema Bank Plc, Ado-Ekiti, Ekiti State. The objectives of the study are: to examine the impact of board size on the return on equity, to find out the impact of board composition on the return on equity, to examine the impact of directors’ equity holding on the return on assets, to ascertain the impact of the level of corporate governance disclosure on the return on equity, to determine the relationship between audit committee size and return on assets of Wema Bank Plc, Ado-Ekiti, Ekiti State. The study made use of descriptive survey research method, the population of the study comprised of 60-member of staff of Wema Bank Plc, Ado-Ekiti, Ekiti State (Okesha and Old Garage respectively), 52 questionnaires were administered to respondents but only 50 questionnaires were fully filled and returned, Tables and simple percentages were used as tools for the analysis. The data, hypotheses were tested using chi-square. From the researchers’ findings, it is seen that a negative relationship exists between board size, board composition with proportion to non-executive directors and audit committee size to financial performance of banks. While the directors’ equity holding and level of corporate governance disclosure index shows positive significant relationship with performance. Also, a percentage increase in return on equity can be explained by directors’ equity holding. The researcher recommended that a legal framework specifying the rights and obligations of a bank, its directors, shareholders, specific disclosure requirements should be developed and this should provide for effective enforcement of the law. Also, there should be steps for compulsory compliance with the corporate governance code.