Effect of Board Attributes on Credit Risk of Listed Deposit Money Banks in Nigeria

Nwala, M. Nneka, Aza, S. M and Abdullahi, Mohammed Itopa
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Nwala, M. Nneka: Department of Finance, Faculty of Administration,, Postal: Nasarawa State University, Keffi, Nasarawa State, Nigeria, https://www.afarng.org/mjms/
Aza, S. M: Department of Finance, Faculty of Administration,, Postal: Nasarawa State University, Keffi, Nasarawa State, Nigeria, https://www.afarng.org/mjms/
Abdullahi, Mohammed Itopa: Department of Finance, Faculty of Administration,, Postal: Nasarawa State University, Keffi, Nasarawa State, Nigeria, https://www.afarng.org/mjms/

Multidisciplinary Journal of Management Sciences, 2021, vol. 3, issue 2, 154-172

Abstract: This study examined the effect of board attributes on credit risk of listed deposit money banks in Nigeria from 2011-2020. Specifically, this study investigated the effect of board size, board diversity and frequency of meetings on credit risk. The study adopted Ex-post facto research design. Ex-post facto research design was used because the study relied on secondary data was extracted from listed deposit money banks in Nigerian. The population of this study are all the fourteen (14) deposit money banks listed on the floor of Nigerian Stock Exchange as at December, 2020. Panel regression analysis is used by the study as the technique of analysis. The study found that frequency of board meeting and board financial expertise has a positive and a significant effect on credit risk of listed deposit money banks in Nigeria however, board gender diversity has a positive and insignificant effect on credit risk of listed deposit money banks in Nigeria. Based on the results of findings the study recommends that; Banks in Nigeria should ensure number that the number of board members with financial expertise be more than members without financial expertise as the presence of more board members with financial expertise can improve the quality of decision-making on credit risk. Also, female representation in the board has proven to be ineffective, therefore much thought should not be given to the ratio of female to men on the board. Finally, it is suggested that regulatory bodies responsible for regulating banks should statutorily increase the frequency of board meetings this will help them to come up with more strategic ways of mitigating credit risk of banks

Keywords: Credit Risk; Board Expertise; Board gender diversity; Frequency of board meeting (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ris:amjoms:0048

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