EFFECT OF BOARD CHARACTERISTICS ON FINANCIAL PERFORMANCE OF LISTED COMMERCIAL BANKS IN NIGERIA
Samuel Ukerchia Iyuwa Ph.D, Pyelshak Aaron Mwelsen and Gwaison Panan Danladi
Volume 10 Issue 1
Abstract
The commercial banking sector globally has experienced significant transformations over the years, driven by regulatory reforms, technological advancements, and changing consumer preferences. This study examined the effect of board characteristics on financial performance of listed commercial banks in Nigeria. An ex-post facto research design was used. Board Size (BSZ), Board Independence (BID), Board Diversity (BDV) and Board Tenure (BT) were the proxies for the independent variables board characteristics. While, the dependent variable the financial performance of listed commercial banks in Nigeria was proxies by Return on assets (ROA). Secondary data from 2015-2022 was used, the data sourced from Nigeria stock exchange fact book 2022. A panel regression technique was used to analyse the data with the aids of E-veiw 10. The result revealed that Board Size has positive but insignificant effect on the financial performance of listed commercial banks in Nigeria, board Independence and board diversity have positive and significant effect on the financial performance of listed commercial banks in Nigeria. Board Tenure has negative and significant effect on the financial performance of listed commercial banks in Nigeria. The study concluded that board characteristics and attributes has significant effect on financial performance of listed commercial banks in Nigeria. The study recommended that banks to ensure that their boards comprise independent directors who can provide impartial oversight and guidance. This may contribute to improved financial performance and governance. Banks should implement policies that encourage board member turnover and limit extended tenures to avoid potential stagnation and complacency. Keywords: Board Size, Board Independence, Board Diversity, Board Tenure, Return on assets
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