ABSTRACT
This study was designed to empirically investigate the effect of corporate governance on the financial performance of pension fund administrators in Nigeria within the period of 2004 – 2014. The study employed the use of secondary data sourced from the websites and audited financial statements of pension fund administrators in Nigeria. For the purpose of the study, board size and board composition were used as the proxy for corporate governance and return on asset was used a proxy for the financial performance of pension fund administrators. These variables were then subjected to a multiple regression analysis using the Ordinary Least Squares (OLS) estimator at 5% level of significance with the return on asset as the dependent variable. From the study, it was found that board size has a positive and statistically insignificant relationship with the return on asset of pension fund administrators. On the other hand, board composition measured by ratio of board members with financial expertise (experience in banking/investment, insurance and/or pension), to total number of the board members was found out to have a negative but no statistically significant relationship with the return on asset of pension fund administrators. This could be as a result of involving more board members who are not financial expertise in the board of pension fund administrators and as such, their decisions and their inexperience of financial matters tends to be detrimental to the performance of the pension fund administrators in Nigeria. The study therefore recommended that, in board composition, there should be a reduction in the number of board members who do not have financial expertise especially in the area of banking/investment, insurance and/or pension as this professional expertise is vital for high profitability of pension fund administrators in Nigeria.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgment v
Abstract vi
Table of Contents vii
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of Problem 4
1.3 Objective of the Study 5
1.4 Research Question 5
1.5 Statement of Hypothesis 6
1.6 Significance of the Study 6
1.7 Scope of the Study 7
1.8 Limitation of the Study 8
1.9 Definition of Terms 8
1.10Organization of the Study 10
Reference 11
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Theoretical Framework 12
2.1.1 Theories of Corporate Governance 12
2.1.2 Theories of Pension Fund 18
2.1.3 Discussion of the Theoretical Framework 20
2.2 Conceptual Framework 21
2.2.1 An overview of Corporate Governance and pension funds 21
2.2.2 Overview of the Pension Reform Act 23
2.2.3 Pension Administration in Nigeria 25
2.2.4 Reasons for the creation of corporate governance in Nigeria 26
2.2.5 Corporate Governance and the Pension Reform Act 2004 27
2.2.6 Factors challenging the Corporate Governance
practices in Nigeria 34
2.2.7 Relationship between corporate governance and
the financial performance of pension fund
Administrators in Nigeria 35
2.3 Empirical Review 36
2.4 Gap in Literature 43
References 45
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction 50
3.1 Research Design 50
3.2 Population of the Study 50
3.3 Sample Size and Sampling Techniques 50
3.4 Data Collection Techniques 51
3.5 Operational Measure of Variables 51
3.6 Model Specification 51
3.6 Method of Data Analysis 53
References 54
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation 55
4.2 Data Analysis 56
4.3 Discussion of Findings 57
4.4 Hypothesis Testing 58
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Summary of Findings 60
5.2 Conclusion 61
5.3 Recommendations 61
Bibliography 63
Appendices 64