The Influence of Risk Management Committee Characteristics on Bank Asset Quality

Abstract

Strengthening the banking sector have remain a critical issue in most financial markets. Therefore, thispaperconducts a review on whether ban k risk management committee (RMC) characteristics can influence bank asset quality, measured as the ratio of banks non-performing loans (NPLs) in Nigeria. To achieve the objective of the study, a review ofprior literature that have examined series of RMC characteristics on several corporate outcomes was considered. The review showed that certain characteristics of the RMC may improve the risk governance of banks. These characteristics include the RMC independence,RMC size,RMC meetings, RMC gender, RMC expertise, presence of CEO on the RMC, RMC chair-gender and RMC chair-independence. Thus, future studies can examine whether the RMC characteristics play any significant role towards reduction of non-performing loans of Nigerian banks, thereby improving banks assets quality. Investigating this issue is necessary because sound financial system promotes economic growth.