CORPORATE GOVERNANCE MECHANISM AND CASH CONVERSION CYCLE MANAGEMENT OF LISTED CONGLOMERATES IN NIGERIA

CORPORATE GOVERNANCE MECHANISM AND CASH CONVERSION CYCLE MANAGEMENT OF LISTED CONGLOMERATES IN NIGERIA

Authors

  • PROF. ALI SULAIMAN KANTUDU
  • SALEH MUHAMMAD BAHAMMAN
  • SABO MOHAMMAD

Keywords:

Corporate governance, Cash Conversion Cycle, Management, conglomerates, Nigeria

Abstract

This study examines the impact of Corporate Governance Mechanism on Cash Conversion
Cycle Management of listed conglomerates in Nigeria over the period 2004-2013. Sample of
five firms out of six listed conglomerates on the Nigerian Stock Exchange was studied. The
study makes use of secondary data generated from Annual Reports and Accounts of the
sampled firms and the Nigerian Stock Exchange Fact book. The data was analyzed by means
of descriptive statistics, correlation and regression analysis using STATA package. A Panel
Data Regression Technique was employed since the data has both time series and cross
sectional characteristics. Therefore, pooled OLS, fixed effect and random effect were applied
to estimate the model. It is revealed that board size and board composition had significant
positive impact on Cash Conversion Cycle while Audit Committee Size showed a negative and
insignificant impact on Cash Conversion Cycle. The study concluded that corporate
governance plays important role in improving Cash Conversion Cycle management. It is
therefore recommended that optimum board size (mean of eight) is necessary for effective
management of Cash Conversion Cycle, the majority of board composition should comprise of
non-executive and independent directors for effective monitoring of working capital
management. Also, in line with the provision of Companies and Allied Matters Acts
should composed of maximum members of six and equal
number of directors and representatives of the shareholders of the company because of the
inverse relationship that exists with the Cash Conversion Cycle.

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Published

2023-08-08

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Section

Articles