Conceptual framework on corporate governance mechanisms and its relationship with financial performance in manufacturing firms

Abstract

Manufacturing sector in Nigeria has also experienced distress, and this was as result of COVID-19 has caused substantial distraction to the financial markets and mostly affected manufacturing companies. Causing few investors in manufacturing companies both local and international, others are liquidating due to poor performance and deficiency in sustainability,
which caused a significant fall in GDP figures as reported by National Bureau of Statistics, indicating contribution of manufacturing sector to the national income plunged from 8.97 trillion naira as at December 2015 to 8.89 trillion naira as at December 2016. Nigeria’s Gross Domestic Product (GDP) witness a rapid grew by 3.54% in real terms in the second quarter of
2022. Consequently, crucial recommendation is for boards of directors to highlight the improvement of management practices, concentrating particularly on strategic planning to reinforce a company's competitiveness. The present study describes two primary objectives: first, an examination of the relationship between board composition and financial performance; and second, an examination into the relationship between board ownership and financial performance. These objectives are followed through a conceptual review methodology, which critically evaluates relevant literature and conceptual frameworks.