Corporate Governance Effectiveness and the Profitability of Listed Insurance Firms in Nigeria

Abstract

The research explored the correlation between profitable insurance firms listed in Nigeria and their strong corporate governance practices. This investigation employed an ex post facto research methodology, utilizing secondary data from ten (10) Nigerian insurance companies that are listed. The information, which covers the years 2012 through 2020, was gathered from the stock market fact book website as well as the annual reports and accounts of Nigeria's listed insurance companies. Descriptive statistics and a random-effect Generalized Least Square (GLS) multiple linear regression technique were used to thoroughly evaluate the gathered data.  The research yielded some fascinating findings. First, it discovered a positive (.8370497) and statistically significant (0.005) relationship between board size (BDS) and return on assets (ROA) of the selected listed insurance firms in Nigeria from 2012 to 2020. Furthermore, the findings demonstrated a positive (2432262) but statistically insignificant (0.431) association between board independence and the return on assets of Nigeria's listed insurance firms during the same time period. According to the findings of the study, corporate governance landscape has enhanced the performance of Nigerian insurance industry. Based on these findings, the study puts forward valuable recommendations. Firstly, it recommended that companies should assess their current board compositions and evaluate the potential benefits of increasing board size by including individuals with diverse skill sets and backgrounds. Additionally, it was suggested that insurance companies in Nigeria thoroughly evaluate the independence of their board members, aiming to strike a balance between independence and industry expertise.