An Assessment of Board Attributes and Financial Performance of Listed Deposit Money Banks in Nigeria

Abstract

Deposit Money Banks (DMBs) are the backbone of the financial system, playing a crucial role in mobilizing savings, allocating capital, and facilitating economic growth. In light of this, the study focused on the analysis of firm attributes and how they affect the financial performance of Nigeria's publicly quoted deposit money banks with a strong emphasis on analyzing how board size, board independence, board diversity, board expertise, and CEO duality affect the financial performance of the selected institutions. Return on assets (ROA), return on equity, (ROE) and Tobin's Q (TQ) were employed to evaluate financial results. The study used ex-post facto and longitudinal research designs in obtaining the data from the financial statements of the selected banks. The population of the study was nineteen (19) deposit money banks listed on the Nigerian Exchange Group profile as of 31st December 2021. The choice of selection of this sector was based on the fact that banks are the bedrock of Nigeria’s economy. The study used a purposive sampling technique due to the complete availability of data and the sample size was ten (10) firms. The data collected for this study we reanalyzed by panel estimation techniques. The results found that board size had an insignificant effect on ROA, ROE, and TQ. Whereas board independence, board diversity, board expertise, and CEO duality had a significant effect on ROA, ROE, and TQ. The study concluded that the number of board’s members did not have anything to do with the financial performance of deposit money banks in Nigeria. The study recommends that deposit money banks should adhere strictly to corporate governance codes and ensure the complete independence of their directors to enhance their financial performance.