Effectiveness of Corporate Governance on SMEs in the Stock Broking Firms in Nigeria

Corporate Governance is a broad term that defines the methods, structure and the processes through which the business and affairs of an organisation is managed and directed in the best interest of the company and other stakeholders. An effective Corporate Governance mechanism eliminate the conflict of ownership and control by separately defining the interest of shareholders and managers. This paper reviews the effectiveness of corporate governance on SMEs in the stock broking firms in Nigeria. Questionnaire was formulated using five-point Likert scale to collect data from a sample size of 200 stock broking owners and managers using convenience sampling technique. Valid responses were received from 171 respondents which was analysed using SPSS. The results shows that stock broking firms shows higher responsibility and commitment to corporate governance, the structure and functioning of the board of directors and the control environment and process complied with corporate governance structure while transparency and disclosure requirements positively affect the overall performance by the SMEs in the stock broking firms. The study suggest that there is need for more awareness on the importance of good corporate governance on SMEs in Nigeria. Also, the regulatory authorities should ensure close and proper monitoring of the SMEs in the stock broking firms to ensure that the corporate governance gains achieved are not only sustained but improved upon for the stakeholders’ benefits.