CORPORATE GOVERNANCE AND THE FINANCIAL PERFORMANCE OF PENSION FUND ADMINISTRATORS IN NIGERIA

ABSTRACT: The primary objective of this research was to conduct an empirical examination of the impact of corporate governance on the financial performance of pension fund managers in Nigeria, specifically focusing on the time frame spanning from 2010 to 2022. The research utilised secondary data obtained from the websites and audited financial statements of pension fund managers in Nigeria. In this study, the variables of board size and board composition were employed as indicators of corporate governance, whereas return on assets was utilised as a measure of the financial performance of pension fund administrators. The variables were subsequently submitted to a multiple regression analysis utilising the Ordinary Least Squares (OLS) estimator at a significance level of 5%. The dependent variable in this analysis was the return on asset. The study revealed that there exists a positive correlation between board size and the return on asset of pension fund administrators. However, it was determined that this association lacks statistical significance. In contrast, the examination of board composition, specifically the ratio of board members possessing financial expertise in areas such as banking, investment, insurance, and pension, to the total number of board members, revealed a negative correlation with the return on assets of pension fund administrators. However, this relationship was not found to be statistically significant. This phenomenon may arise from the inclusion of board members who lack financial competence in the board of pension fund administrators. Consequently, their decision-making and limited understanding of financial matters may have adverse effects on the performance of pension fund administrators in Nigeria. The study thus suggests that it is advisable to decrease the presence of board members lacking financial expertise, particularly in the domains of banking, investment, insurance, and pension. This professional knowledge is crucial for ensuring the optimal profitability of pension fund administrators in Nigeria.