EFFECT OF CORPORATE GOVERNANCE ON FINANCIAL PERFORMANCE OF PHARMACEUTICAL FIRMS IN NIGERIA: EVIDENCE FROM MAY & BAKER PLC
Abstract
This study examined the effect of corporate governance on financial performance of
Pharmaceutical Firms in Nigeria. Specifically, the study determined the effect of Board Size,
Board Diligence and Board Diversity on return on asset of Pharmaceutical Firms in Nigeria
with evidence from May & Baker Plc. An ex –post facto research design approach was adopted
for the study. The population of this study comprised of ten (10) listed Pharmaceutical Firms in
Nigeria. Using time series data for the period of six (6) years (2018 to 2023) and a purposive
sampling method, May & Baker Plc was chosen as the sample size, this was due to its
profitability position in the industry. Secondary data were obtained which includes the annual
report of the companies from 2018 to 2023 financial years derived from the company and the
company’s website. The data collected were presented and analyzed using tables, descriptive
and inferential statistics. Three hypotheses were formulated and tested in the course of this
study. Regression analysis was used to test for statistical significance of the impact of corporate
governance on financial performance of Pharmaceutical Firms in Nigeria. The results showed
that Board Size has significant impact on return on asset of May & Baker Plc. The findings
further revealed that Board Diligence does not have significant impact on return on asset of May
& Baker Plc. Finally, the result established also that Board Diversity does not have significant
effect on return on asset of May & Baker Plc. Consequent upon the findings, this study
recommends among others; that Membership to the board should be increased to a maximum
number since only larger number on board can agued out decision that will be of benefit to the
firm. Again, Corporate governance should ensure better decision-making policies, maximize
profits and reduce the risk of human interference activities such as fraud, robbery, super-star
culture or ̳the only star’ who commits no mistakes
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