Abstract
This paper aims to discover the association between various audit committee and board attributes and the market performance of listed deposit money banks in Nigeria. The study intends to determine the influence of audit committee size, gender diversity, expertise, board size and board shareholding on market performance (measured by Tobin Q). Panel data was gathered from twelve (12) banks listed on the Nigerian Stock Exchange from 2013 to 2017. The study used fixed and random regression analysis. The results concluded that the association between audit committee size, board size and Tobin Q was negatively significant. There was a positively significant impact of audit committee gender diversity and audit committee expertise on Tobin Q. The study showed a positive but insignificant influence of board shareholding on market performance. The results imply that weakness in governance structures might lead to lower market performance. This study recommends that firms ensure that appointment criteria prioritize knowledge and competence, and regulatory bodies are also encouraged to track the compliance of listed firms with corporate governance regulations. AcknowledgmentThe authors would like to acknowledge Covenant University for its financial support during the course of this research paper.
Highlights
Banks dominate in providing substantial access to adequate credit services for various individuals in many countries
Given the importance of board of directors and audit committees, this study aims to add to existing knowledge by revisiting certain governance features where there has been little or no addition to literatures and focusing on the effects of the attributes of the audit committee and board on the market performance of banks in Nigeria, as a developing country, since previous research has focused more on the market performance of businesses in other industries
Audit committee size has an average of five members approximately, whereas the largest comprised of nine members, and the smallest included three persons only
Summary
Banks dominate in providing substantial access to adequate credit services for various individuals in many countries. They offer both national and international funds, resources and investments designed to impact the country’s economic growth. Financial difficulties that many companies have faced in recent years have contributed to the need for ethical/professional standards and controls to gain credibility in the financial accounts. These deficiencies allegedly exist due to conflicts of interest, board inefficiency, inefficiency of external auditors, lack of audit committee independence and shortcomings in their governance structures (Adeyemo, 2012).
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