Abstract

The paper examines the extent to which corporate governance contributed to financial crisis in the Nigerianbanking industry between the periods 2000 and 2010. Panel data on post consolidated banks in Nigeria for thepre and post 2004 consolidation reforms were used. Two measures of bank performance (return on equity and netinterest income) were used as dependant variable on a model that included both number of board members andrelated insider loans as measures of corporate governance. It was found that while size of board was significantpositive insider loan is negatively related to bank performance. The paper concludes that insider loan was themost detrimental consequence of lack of corporate governance in the Nigeria banking industry. The issue raisedin some studies about the size of the board members, this paper found a relatively higher number of boardmembers to be more performance enhancing and aiding effective coordination of banks operating within thepeculiarity of Nigerian financial system.

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