1.1 BACKGROUND OF THE STUDY
Corporate governance mechanisms is concerned with the intrinsic nature, purpose, integrity, and identity of the institution with a primary focus on the entity’s irrelevance, continuity and judiciary aspects. It means that the governance involves monitoring and overseeing strategic direction, socio economic and cultural context, externalities and constituencies of the institution.
Corporate governance mechanisms is also includes the relationship among the stakeholders involved in the goal for which the corporation is governed.
Bank financial performance on the other hand, is the presentation of the summarized result of operation of an organization, this summarized result has helped to know the improvement of many banks in Enugu metropolis and also helps in relation of the financial aspect of corporate existence in Enugu metropolis.
Sound corporate governance has becomes imperative for bank stability because it improve the performance of monetary polices in Enugu metropolis, especially in commercial banks of the metropolis which render retail-banking services and also provides current account that allow the use of cheques to the metropolis.
Government in order to maintain macroeconomic stability, provide regulatory agencies that surprise and regulate some organization through the corporate affairs commission and other regulatory agencies like Central bank of Nigeria, securities and Exchange commission, Nigerian Deposit Insurance Commission, etc, but some of these regulatory agenesis have failed to carryout their responsibilities effectively.
There has been greater demand for transparency requiring more requiring more reliable and accountable financial reporting that would ensure adequate protection of corporate stakeholders. This was because it was generally believed that the financial scandals in which people lost billions of dollars were caused by distortion in the corporate governance structure and financial performance of the affected organization operations leading to inefficient financial decision making.
The fundamental concern of corporate governance mechanisms is to ensure the conditions whereby organizations directors act in the interest of there shareholders and to ensure that managers are held accountable to capital provides for use of assets. Therefore, it becomes a crucial element and necessary for the corporate governance system to function effectively (Wikipedia, free encydopedia 2006).