CORPORATE GOVERNANCE PRACTICES AND FIRM VALUE : LESSION FROM SELECTED FOOD AND BEVERAGE MANUFACTURING INDUSTRIES IN NIGERIA.

Abstract

Corporate governance has become one of the most significant determinants of organizational performance and firm value in today's dynamic business environment. Despite continuous improvements in corporate governance regulations in Nigeria, evidence suggests that many listed firms continue to experience governance-related challenges that adversely affect their market value and long-term sustainability. Therefore, this study examined the effects of corporate governance practices on the firm value of listed food and beverage manufacturing firms in Nigeria. An ex post facto research design was adopted, utilizing secondary data obtained from the annual reports and financial statements of seven (7) listed food and beverage manufacturing firms in Nigeria over a ten-year period (2016–2025). Data were analyzed using Principal Component Analysis (PCA), Pearson Correlation Analysis, and Ordinary Least Squares (OLS) regression analysis. The Principal Component Analysis revealed that the first two principal components explained 54.07% of the total variation in the corporate governance variables, indicating that the selected governance mechanisms adequately represented corporate governance practices among the sampled firms. The correlation analysis showed no evidence of serious multicollinearity among the explanatory variables. The regression results indicated that board size had a positive and statistically significant effect on firm value (β = 0.202637, p < 0.05), suggesting that larger boards contribute significantly to improved firm value through enhanced monitoring and strategic decision-making. Conversely, board independence, board gender diversity, CEO duality, and audit committee independence exhibited statistically insignificant effects on firm value during the study period. The study recommends that firms should maintain an optimal board size comprising individuals with diverse professional expertise, strengthen the effectiveness of independent directors and audit committees, promote merit-based board diversity, and ensure strict compliance with corporate governance codes issued by regulatory authorities.