Title: Audit committee independence, abnormal directors compensation, corporate governance disclosure and price to earnings multiple of Nigerian firms

Authors: Isah Shittu; Ayoib Che Ahmad; Zuaini Ishak

Addresses: School of Accountancy, College of Business, Universiti Utara Malaysia, Kedah, 06010, Malaysia ' School of Accountancy, College of Business, Universiti Utara Malaysia, Kedah, 06010, Malaysia ' School of Accountancy, College of Business, Universiti Utara Malaysia, Kedah, 06010, Malaysia

Abstract: The failure of corporate organisations has continued to attract interest of stakeholders globally. Countries across the world issued different regulations for best practices to avoid corporate failure. In Nigeria similar guides are issued known as the codes of corporate governance CG. However stakeholders continue to argue on whether CG improves the value of stockholders particularly in Nigeria. This study empirically investigated the effect of audit committee independence (ACI), abnormal directors compensation and disclosure of CG information on price to earnings multiple of Nigerian firms. The study used data of 100 firms listed on the Nigerian Stock Exchange (NSE). The study used generalised method of moment (GMM) to estimate the regression because of endogeneity problem. The results reveal a significance positive relationship between the three CG variables and price to earnings multiple of Nigerian firms. Therefore, the study recommends consideration of above CG variables before investment decision.

Keywords: ACI; audit committee independence; abnormal director's compensation; corporate governance; CG disclosure; NSE; Nigerian stock exchange; Nigeria.

DOI: 10.1504/JGBA.2018.10015796

Journal for Global Business Advancement, 2018 Vol.11 No.2, pp.156 - 172

Received: 11 Dec 2015
Accepted: 11 Jun 2016

Published online: 31 Aug 2018 *

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