Governance of Listed Holding Companies and Subsidiary Performance in Nigeria: An Agency Theory Perspective

This study examines the governance of listed holding companies and its relationship with subsidiary performance in Nigeria, applying an agency theory framework. Holding company structures, which are prevalent among Nigeria's largest listed conglomerates, create complex principal-agent relationships operating simultaneously at the holding company board, subsidiary board, and management levels. Governance at the holding level, including the allocation of board oversight responsibilities, intercompany transaction management, and consolidated financial reporting quality, is expected to influence the strategic and operational performance of subsidiaries. Drawing on multi-level agency theory and the internal capital market literature, this study investigates how holding company governance quality, measured by board independence, audit committee effectiveness, and transparency practices, relates to subsidiary-level performance indicators including return on assets, revenue growth, and asset utilisation ratios. A panel dataset comprising eight listed holding companies and their thirty-five subsidiaries over six years is assembled from consolidated and subsidiary-level financial reports. Multilevel regression analysis accounts for the nested structure of the data. The study addresses a methodological gap in the Nigerian governance literature by applying multilevel analysis to the holding company-subsidiary governance relationship. Findings will assist the Financial Reporting Council, listed holding company boards, and institutional investors in designing group governance frameworks. Keywords: holding company governance, subsidiary performance, agency theory, corporate governance, multilevel analysis.