Abstract:
The Nigerian banking environment is a vibrant and challenging financial environment and is
endemic with systemic governance problems, capacity constraints and defaulting in
compliance and implementation of laws which has inhibited economic growth. Therefore the
current investigation focuses on association between organizational governance and
profitability of deposits money banks in Nigeria. Three indicators of corporate governance
mechanism (board composition, board size and directors’ interests) were incorporated in the
study. Relevant information was extracted from audited financial statements of the selected
banks. The results of the regression analysis revealed the existence of positive but
non-statistically significant association between board composition and profitability on one
hand; and board size and profitability on the other hand. However, a non beneficial and
non-significant association exists between directors’ interests and profitability in the Nigerian
banks. Based on the findings of the study, the study recommends that in order to prevent
distress in the banking sector, there should be a regular review of the corporate governance
codes so as to reflect current social, environmental, technological and economic situations.
