Corporate Governance Quality and Credit Rating Decisions in Nigeria: A Study of Rated Firms in Lagos and Abuja

This study examines the relationship between corporate governance quality and credit rating decisions affecting listed firms in Lagos and Abuja, Nigeria. Credit rating agencies increasingly incorporate governance factors into their assessment frameworks, recognising that governance quality is a proxy for financial risk and management reliability. In Nigeria, where credit markets are relatively shallow and rating agency capacity is developing, understanding the governance-rating nexus has practical implications for corporate finance and capital market development. Drawing on signalling theory and credit risk literature, this study investigates how governance dimensions including board independence, audit committee quality, and disclosure transparency relate to credit rating categories assigned by recognised rating agencies. An ex-post facto design is adopted, using secondary data from credit rating reports and annual reports of forty rated firms across Lagos and Abuja over three years. Ordered logistic regression is employed with firm size, leverage, and profitability as control variables. The study expects higher governance quality scores to be positively associated with investment-grade credit ratings. Findings will assist corporate treasurers, board governance committees, and the Financial Reporting Council in understanding governance investments as credit risk management tools. Keywords: corporate governance, credit rating, financial risk, listed firms, Lagos Abuja.