CORPORATE GOVERNANCE AND LEVERAGE POSITION OF QUOTED CEMENT COMPANIES IN NIGERIA

This paper explores the relationship between corporate governance and capital structure of quoted cement firms in Nigeria for the period 2004 to 2007. Four quoted Cement firms on Nigeria Stock Exchange were examined using multivariate regression analysis techniques. Measure of corporate governance employed were board size, board composition, composition of audit committee. Effect of shareholding on leverage was examined using managerial shareholding and institution shareholding. Similarly the leverage was measured as ratio of total debts to shareholders’ fund. Results reveal that managerial shareholding and institutional shareholding as well as composition of audit committees have positive correlation with leverage position of selected firms, whereas board size is negatively correlated with debt to equity ratio. However, leverage behaviour is not found significantly influenced by composition of audit committee and composition of board member. It is recommended that compliance with code of corporate governance among cement firms in Nigeria need to be enforced. The managerial shareholding need to be encouraged as this will make them run the business with utmost good faith.