RETENTION POLICY, CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

Sequel to the economic policy direction of the new administration in Nigeria with regards to fuel subsidy removal and uniform foreign exchange rate, together with its attendants effect on the GOP. This paper examined the nexus between retention policy and the financial performance of listed manufacturing firms in Nigeria using corporate governance as a moderating variable together with financial leverage, li9quidity, tangibility, firm size and firm age as control variables. Descriptive survey research design was adopted using secondary data. Based on purposive sampling techniques the study obtained relevant data from 56 firms, whose stocks were traded consistently from 2008 to 2018 out of a population of 78 listed firms. Tables, percentages and random effect estimations were used to analyze the data. The result of the analysis empirically revealed that at 1% level of significance, a positive relationship exist among retention policy, corporate governance and the financial performance of firm (proxy with ROA). In addition, all the control variables also exhibited significant relationship at 1% level. The study therefore concludes that retention policy and practices of efficient corporate governance contributed and significantly enhance financial performance of firms in Nigeria