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Board Components of Corporate Governance and Financial Index of Deposit Money Banks in Nigeria

Author

Listed:
  • Omole Ilesanmi ISAAC

    (Department of Management and Accounting,Lead City University,Ibadan,Oyo State,Nigeria)

  • Adewumi AYODEJI

    (Department of Auditing and Taxation,Durban University of Technology, South Africa)

  • Edokpayi Sunday ADESUWA

    (Department of Accounting,Ignatius Ajuru University of Education,Port Harcourt,River State,Nigeria)

Abstract

This study examined the impact of board components of corporate governance on the financial index of money deposit banks in Nigeria using econometric regression models. Financial index is used to track the performance of Nigerian banks over 10 years using Tobinb s Q as a measurement proxy. The sample comprised thirteen money deposit banks that are listed on the Nigeria stock exchange market over the period between 2011 and 2020. The Panel Fixed Effect results showed that the p-value of the t-statistics calculated for board size was 0.0000, which is less than the critical value of 5%. This implied that board size has significant influence on the financial index of the selected banks and the p-value of the F-statistics computed for the variables for testing the overall fixed effect of the regression model of 0.000000 was less than the critical value of 5%. This suggested that there was a significant relationship between the financial index and board of directorsb index of the deposit money banks in Nigeria. Board independence and the proportion of foreign directors in the total number of directors (as characteristics of corporate board composition) have a significant strong positive impact on firm performance (both contemporaneous and subsequent). The study therefore recommends that banks should have an adequate board that includes both executive and non-executive directors and to exercise caution in populating the board because it will be difficult for the stakeholders to control the board when it is too large.

Suggested Citation

  • Omole Ilesanmi ISAAC & Adewumi AYODEJI & Edokpayi Sunday ADESUWA, 2022. "Board Components of Corporate Governance and Financial Index of Deposit Money Banks in Nigeria," Romanian Journal of Economics, Institute of National Economy, vol. 55(2(64)), pages 160-174, December.
    • Handle: RePEc:ine:journl:v:55:y:2022:i:64:p:160-174
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    References listed on IDEAS

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    More about this item

    Keywords

    Board Component; Financial Index; Tobinb s Q; Board Characteristic;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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