Financial performance: Does Board Monitoring Committees Matter? An Empirical Analysis of Listed Building Material Companies in Nigeria

Abstract

This study examines the association between the monitoring committee of the board and the financial performance of listed building materials companies in Nigeria for the period 2008-2018. The study population is 15 listed building materials companies in Nigeria, out of which a sample of 11 utilized due to non-accessibility and unavailability of data. The independent variable was board monitoring committees proxies by the executive committee, finance and general-purpose committee, nomination and remuneration committee and statutory audit committee, while return on assets (ROA) used to measured financial performance. Data collected from a secondary source through the annual reports and accounts of building materials companies for the period under review. The ordinary least square (OLS) regression techniques employed for data analysis. The finding reveals a positive and significant association between executive committee, statutory audit committee and financial performance, while shows a negative and significant relationship between nomination and remuneration committee and financial performance. The study recommends that board monitoring committees: the executive committee should increase to the maximum of 5 members, the statutory audit committee should increase from 6 to 8 members, nomination and remuneration should decrease to the maximum of 5 members for all building materials companies operating in Nigeria.