An international wave of mergers and acquisitions has swept the banking industry as boundaries between financial sectors and products have blurred dramatically.  There is therefore  the need for countries to have sound resilient banking systems with good corporate governance, which will strengthen and upgrade the institution to survive in an increasingly open environment. In Nigeria, the Central Bank unveiled new banking guidelines designed to consolidate and restructure the industry through mergers and acquisition. This was to make Nigerian banks more competitive and be able to  operate  in the global market. Despite all its attempts, the Central Bank of Nigeria disclosed that after the consolidation in 2006, 741 cases of attempted fraud  and forgery involving N5.4 billion were reported. In the light of the above, this research examined the relationships that exist between governance mechanisms and financial performance in the Nigerian consolidated banks. And also to find out if there is any significant relationship between the level of corporate governance disclosure index among Nigerian banks  and their performance. The Pearson Correlation and the regression analysis were used to find out whether there is a relationship between the corporate governance variables and firm‟s  performance. In examining the level of corporate governance disclosures of the sampled banks, a disclosure index was developed guided by the CBN code of governance and also on the basis of the papers prepared by the UN secretariat for the nineteenth session of ISAR (International Standards of Accounting and Reporting). The study therefore observed that a negative but significant relationship exists between board size, board composition and the financial performance of these banks,  while a positive and significant relationship was also noticed between directors‟ equity interest, level of governance disclosure and performance.  Furthermore, the t-  test result indicated that while a significant difference was observed in the profitability of the healthy banks and the rescued banks, no difference was seen in the profitability of banks with foreign directors and that of banks without foreign directors.  The study therefore  concludes that  there is no uniformity in the disclosure of corporate governance practices  by the banks. Likewise, the banks do not disclose in general how their debts are performing, by providing a statement that expresses outstanding debts in terms of their ages and due dates. The study suggests that efforts to improve corporate governance should focus on the value of the stock ownership of board members. Also,  steps should be taken for mandatory compliance with the code of corporate governance while an effective legal framework  should be  developed that specifies the rights and obligations of a bank, its directors, shareholders, specific disclosure requirements and provide for effective enforcement of the law.

Title Page --------------------------------------------------------------  i
Declaration--------------------------------------------------------------  ii
Certification------------------------------------------------------------  iii
Dedication--------------------------------------------------------------  iv
Acknowledgements--------------------------------------------------------  v
Table of Content----------------------------------------------------------  vi
List of Tables------------------------------------------------------------  vii
List of Figures------------------------------------------------------------  viii
Appendices--------------------------------------------------------------  ix
Acronyms and Definitions--------------------------------------------------  x
Abstract----------------------------------------------------------------  xi

CHAPTER ONE: Introduction
10  Background to the Study--------------------------------------------------  1
11  Statement of Research Problem---------------------------------------- 6
12  Objectives of Study--------------------------------------------------  10
13  Research Questions------------------------------------------------------------------  11
14  Research Hypotheses------------------------------------------------------------------   12
15  Significance of the Study---------------------------------------------- 13
16  Justification of Study------------------------------------------------  14
17  Scope and limitation of Study------------------------------------------  16
18  Summary of Research Methodology------------------------------------  17
19  Sources of Data  ----------------------------------------------------  18

CHAPTER TWO: Literature Review and Theoretical Framework
20  Introduction  ------------------------------------------------------  25
21  What is Corporate Governance?------------------------------------------------------   26
22  Historical Overview of Corporate Governance ----------------------------28
23  Corporate Governance and Banks----------------------------------------  30
24  Elements of Corporate Governance in Banks ------------------------------  34
241  Regulation and Supervision as Elements of Corporate
Governance in banks------------------------------------  36
25  Corporate Governance Mechanisms------------------------------------ 41
251  Shareholders -------------------------------------------- 42
252  Debt Holders--------------------------------------------43
26  Linkage between Corporate Governance and Firm Performance Practices------46
27  The Role of Internal Corporate Governance Mechanisms in Organisational
Performance--------------------------------------------------------  48
271  Role of Auditor------------------------------------------  48
272  Role of the Board of Directors------------------------------  49
273  Role of Chief Executive Officer----------------------------  50
274  Role of Board Size-------------------------------------- 51
275  Role of CEO Duality------------------------------------  52
276  Role of Managers----------------------------------------  52
28  Regulatory Environment for Banks in Nigeria------------------------------  53
29  Governance Standards and Principles around the World----------------------  56
291  United Kingdom----------------------------------------  56
2911  The Cadbury Report (1992)-------------------------------- 57
2912  The Greenbury Report (1995)------------------------------  58
2913  The Hampel Report (1998)--------------------------------  58
2914  The Higgs Report (2003)----------------------------------  59
2915  The Combined Code of Corporate Governance (2003)----------  60
292  OECD------------------------------------------------  61
293  Australia----------------------------------------------  63
294  United States--------------------------------------------  64
295 Standards and Principles Summary--------------------------  67
210  Corporate Governance and the Current Crisis in Nigerian Banks-------------- 68
211  The Current Global  Financial Crisis-------------------------------------- 70
212  Prior Studies on Specific Corporate Governance Practices and Firm-Performance--------------------------------------------------------  76
2121  Board Composition--------------------------------------77
2122  Board Size----------------------------------------------79
2123  Shareholder‟s Activities----------------------------------  83
213  The Perspective of Banking Sector Reforms  in Nigeria--------------------  89
214  State of Corporate Governance in Nigerian Banks--------------------------  92
215  The Imperatives of Good Corporate Governance in a Consolidated Nigeria
Banking System----------------------------------------------------  96
216  Corporate Governance and the Banking System: Lesson from Malaysia--------  104
2161  Asian Crisis and Banking Sector Problems--------------------106
2162  Evolution and Restructuring of the Malaysian Banking Sector----108
2163  Ownership Structure of Banks before and after the Asian Crisis   108
217  Theoretical framework for Corporate Governance--------------------------  110
2171  Stakeholder Theory----------------------------------------110
2172  Stewardship Theory--------------------------------------112
2173  Agency Theory----------------------------------------  114
2174   Agency Relationships in the Context of the Firm--------------  116

CHAPTER THREE: Research Methods
30   Introduction--------------------------------------------------------  137
31  Research Design----------------------------------------------------  137
32  Study Population--------------------------------------------------  139
33  Sample and Sampling Method----------------------------------------  139
34  Data Gathering Method----------------------------------------------  140
341  Types and Sources of Data --------------------------------  140
342  Research Instruments------------------------------------ 140
343  Method of Data Presentation------------------------------  141
35    Model Specification--------------------------------------------------  141
36  Data Analysis  Method------------------------------------------------ 143
361  Content Analysis----------------------------------------  147

CHAPTER FOUR: Data Analysis and Result Presentation
40  Introduction------------------------------------------------------  151
41   Data Presentation and Analysis------------------------------------------------------  152
42  Data Analysis (Preliminary)--------------------------------------------  164
43:  Data Analysis-  Advance (Inferential Analyses)------------------------------------  166
431  Pearson‟s Correlation Coefficient Analysis------------------------  166
432  Regression Analysis ------------------------------------  170
44  Hypotheses Testing------------------------------------------------  173

CHAPTER FIVE: Summary of Findings, Conclusion and Recommendations
50  Introduction-------------------------------------------------------------------- ------186
51  Summary of Work Done--------------------------------------------  186
52  Summary of Findings------------------------------------------------  188
521  Theoretical Findings------------------------------------  188
522  Empirical Findings--------------------------------------------------191
53  Conclusion--------------------------------------------------------------------------1 96
54   Recommendations--------------------------------------------------  197
55  Contribution to Knowledge------------------------------------------ 199
Suggestions for Further Studies------------------------------------------------------ --------  199
References--------------------------------------------------------------  202


LIST OF TABLES

Table 20  Comparison of Corporate Governance Principles  ----------------  65
Table 21  Summary of other Prior Studies on Corporate Governance------------  87
Table 40  Level of Corporate Governance Disclosure of Banks in  Nigeria--------153
Table 41  Percentage of Banks‟ Compliance to Corporate Governance
Disclosure Items --------------------------------------------  154
Table 42  Descriptive Statistics for model 1--------------------------------  164
Table 43  Descriptive Statistics for model 2------------------------------  165
Table 44  Pearson‟s Correlation Coefficients Matrix for Model 1--------------  167
Table 45  Pearson‟s Correlation Coefficients Matrix for Model 2--------------  167
Table 46  Regression Result -------------- ------------------------------170
Table 47   T-test Result for Healthy and Rescued Banks------------------------172
Table 48  T-test Result for Banks with and Wit hout Foreign Directors------------172

LIST OF FIGURES

Figure 20  Corporate Governance Mechanisms  by Outsiders --------------------  45
Figure 21  Corporate Governance Mechanisms by Insiders--------------------  45
Figure 22  Stakeholder Model ------------------------------------------  111
Figure 23  Agency Theoretical Perspective ---------------------------------- 118

APPENDICES
Appendix I    List of consolidated Banks in Nigeria and No of Branches as at
2008----------------------------------------------  227
Appendix II    Total Fraud Cases, Amount Involved and Total Expected Losses in
Nigerian Banks----------------------------------------  228
Appendix III    List of  failed banks which were closed and  having their
Licenses Revoked by the Central Bank of Nigeria, between 1994
and 2006----------------------------------------------  228
Appendix IV    Corporate Governance Disclosure Check List--------------  229
Appendix V    Banks and Average Measurement Variables  ----------------  232
Appendix VI    Descriptive Statistics on Disclosure of Governance Items  ------227
Appendix VII    Comprehensive Result of Regression Analysis------------------233

GLOSSARY OF TERMS
Agency theory:  Agency theory is directed at the ubiquitous agency relationship, in which
one party (the principal) delegates work to another (the agent), who
performs the work
Acquisition:    An acquisition is when one larger company purchases a smaller company
Bankruptcy:  A proceeding in a  federal   court  in which an  insolvent   debtor's  assets  are
liquidated and the debtor is relieved of further  liability
Board composition:   This  is defined as the proportion of representation of non-executive
directors on the board
Board size:  This  is defined as the number of directors both executive and non-executive directors on the board of the bank
Code of Ethics:   Defines acceptable behaviours, promote high standards of practice, and
provides a benchmark for members to use for self-evaluation and establish
a framework for professional behaviours and responsibilities
Consolidation:   The combining of separate  companies,  functional  areas, or product lines,
into a  single  one It differs from a  merger  in that a new  entity  is created in
the consolidation
Corporate Governance: The methods by which suppliers of finance control managers in order to ensure that their capital cannot be expropriated and that they earn a return
on their investment
Earnings per Share:  Total  earnings  divided by the number of  shares outstanding  companies
often use a weighted average of shares outstanding over the reporting term
Executive directors: Directors that are currently employed by the firm, retired employees of the firm, related company officers or immediate family members of firm
employees
Financial Performance:  This is a measure of how well a firm can use assets from its primary   mode of business and generate revenues This term is also used as a  general
measure of a firm's overall financial health over a given period of time
Governance Structure:  Governance structure specifies the distribution of rights and
responsibilities among different participants in the corporation, such as, the
board, managers, shareholders  and other stakeholders, and spells out the
rules and procedures for making decisions on corporate affairs
Independent Director:  A person whose directorship constitutes his or her only  connection to the corporation
Merger:  The combining of two or more companies, generally by offering the
stockholders of one company securities in the acquiring company in
exchange for the surrender of their stock
Non-executive directors:  They are members of the Board who are not top  executives, retired
executives, former executives, relatives of the CEO or the chairperson of the
Board, or outside corporate lawyers employed by the firm
OECD:  The Organization for Economic Cooperation and Development
Poison pills:   A strategy used by corporations to discourage a hostile takeover  by another
company The target company attempts to make its stock less attractive to the
acquirer
Return on Assets:  A  measure  of a company's  profitability, equal to a  fiscal   year's  earnings
divided by its total assets, expressed as a percentage
Return on Equity:  A  measure  of how well a company used reinvested  earnings  to generate
additional earnings,  equal to a  fiscal  year's  after-tax  income  (after  preferred
stock  dividends  but before common  stock dividends) divided by  book value,
expressed as a percentage
Stakeholders:  People who are affected by any action taken by the corporation  an individual or group with an interest in the success of a company in delivering intended
results and maintaining the viability of the company‟s product and/or service
Stewardship theory:  A steward protects and maximizes shareholders‟ wealth through firm
performance, because, by so doing, the steward‟s utility functions are maximized
Shareholders:  Shareholders are people who have bought  shares in a limited liability  company
They own a part of the company in exact proportion to the proportion of the shares they own