Abstract
The purpose of stressing the importance of risk management among construction companies is to reduce the effects of risk on projects and make the construction activities more profitable, completed to quality standards, time and budget. This significant deliberation has stimulated various research interests by construction companies, specifically viewing the risk in construction activities that affect project performance; (time overrun, cost overrun and low quality) as the significant risks attached to the projects from the global point of view. Using Partial Least Squares- Structural Equation Modeling approach, this study validates construction risk management (CRM) as a construct from the perspectives of 238 local, national and multi-national construction companies in Nigeria. A cross-sectional survey was conducted where data was gathered from companies through a structured questionnaire. Findings from this study disclosed that effective communication, team competency and skills with active leadership have a significant influence on construction risk management (CRM) practices of the Nigerian construction companies.
Highlights
The proliferation of fictitious profits in the lead-up to the financial crisis, since the onset of the financial crisis of 2007-2018 and the resulting Great Recession, radical political economists have debated the role of profitability in what has been the most severe systemic crisis of global capitalism since the 1930s (Smith and Butovsky, 2012)
The research findings are in line with the agency theory, audit committee financial expertise is found to have a significant positive influence on profitability
COE and foreign ownership have a positive influence on profitability
Summary
The proliferation of fictitious profits in the lead-up to the financial crisis, since the onset of the financial crisis of 2007-2018 and the resulting Great Recession, radical political economists have debated the role of profitability in what has been the most severe systemic crisis of global capitalism since the 1930s (Smith and Butovsky, 2012). If companies do not worry about agency conflicts, they might face the problem of profitability or insolvency at large These agency conflicts predominantly occur in modern companies as a result of the separation concerning ownership and management (Berle and Means, 1932); (Jensen and Meckling, 1976). The incentive alignment theory advocates that more equity ownership by the manager may increase corporate performance because it means better alignment of the monetary incentives between the management and other equity owners (Jensen and Meckling, 1976). This paper examines the interactive role of audit committee financial expertise on the relation concerning ownership structure and profitability for Nigerian listed financial institutions
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