Journal of Business Systems, Governance and Ethics

This research focuses on who controls shareholder’s wealth maximization and how does this affect firm’s performance in publicly quoted non-financial companies in Nigeria. The shareholder fund was the dependent while explanatory variables were firm size (proxied by log of turnover), retained earning (representing management control) and dividend payment (representing measure of shareholders control). The data used for this study were obtained from the Nigerian Stock Exchange [NSE] fact book and the annual reports of the six sampled companies from Food/ Beverages and tobacco sub-sector for twenty years (1986-2005) to constitute pooled data of 120 observations. Using auto-regression technique for correcting serial auto-correlation in time series data, the results converge at ten iterations. Results showed that all the independent variables provide good explanation for the model. It was observed that firm size (log of turnover) and retained earnings had positive relationships and statistically significant impacts on the shareholders fund while dividend payment had negative relationship. The results show that turnover and retained earnings are of more significance in the control of shareholders wealth than the dividend payment. Thus, we can conclude that the management of the organizations under the present study is in major control of shareholders wealth maximization objective and impact on the firm performance. Implication is that selecting high quality management for the organizations would help in achieving shareholders wealth maximization objective in organizations.