Corporate Governance and Stock Market Performance in Nigeria

ABSTRACTThis study investigates the relationship between corporate governance and stock market performance in Nigeria. The stock market plays a critical role in economic development by mobilizing capital and enhancing investment, but in Nigeria, its performance is undermined by weak governance practices such as poor board oversight, lack of transparency, and ownership concentration. The main objective of the study is to assess how corporate governance influences stock market performance. Specifically, it examines the impacts of board size, board independence, ownership structure, and financial reporting transparency on market capitalization in Nigeria. An ex-post facto research design was adopted, using panel data from listed companies on the Nigerian Exchange Group (NGX) between 2010 and 2024. Data were analyzed using panel regression techniques. The findings reveal that board independence, ownership structure, and transparency in financial reporting have significant positive impacts on stock market performance. However, board size has an insignificant or mixed effect, suggesting that effectiveness depends on optimal board composition. The study concludes that effective governance practices enhance investor confidence, reduce market volatility, and promote sustainable market performance. It recommends stronger enforcement of governance codes, improved board independence, adoption of high-quality financial reporting standards, and support for institutional ownership. These measures will improve investor trust, deepen market liquidity, and foster long-term capital market growth. Major recommendations include regulatory reforms to ensure compliance with governance standards and capacity-building initiatives to strengthen corporate boards and financial reporting quality across sectors.