Board Components of Corporate Governance and Financial Index of Deposit Money Banks in Nigeria

Omole Ilesanmi Isaac, Adewumi Ayodeji and Edokpayi Sunday Adesuwa
Additional contact information
Omole Ilesanmi Isaac: Department of Management and Accounting,Lead City University,Ibadan,Oyo State,Nigeria
Adewumi Ayodeji: Department of Auditing and Taxation,Durban University of Technology, South Africa
Edokpayi Sunday Adesuwa: Department of Accounting,Ignatius Ajuru University of Education,Port Harcourt,River State,Nigeria

Romanian Journal of Economics, 2022, vol. 55, issue 2(64), 160-174

Abstract: This study examined the impact of board components of corporate governance on the financial index of money deposit banks in Nigeria using econometric regression models. Financial index is used to track the performance of Nigerian banks over 10 years using Tobinb s Q as a measurement proxy. The sample comprised thirteen money deposit banks that are listed on the Nigeria stock exchange market over the period between 2011 and 2020. The Panel Fixed Effect results showed that the p-value of the t-statistics calculated for board size was 0.0000, which is less than the critical value of 5%. This implied that board size has significant influence on the financial index of the selected banks and the p-value of the F-statistics computed for the variables for testing the overall fixed effect of the regression model of 0.000000 was less than the critical value of 5%. This suggested that there was a significant relationship between the financial index and board of directorsb index of the deposit money banks in Nigeria. Board independence and the proportion of foreign directors in the total number of directors (as characteristics of corporate board composition) have a significant strong positive impact on firm performance (both contemporaneous and subsequent). The study therefore recommends that banks should have an adequate board that includes both executive and non-executive directors and to exercise caution in populating the board because it will be difficult for the stakeholders to control the board when it is too large.

Keywords: Board Component; Financial Index; Tobinb s Q; Board Characteristic (search for similar items in EconPapers)
JEL-codes: C21 C26 G1 G2 G3 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.revecon.ro/articles/2022-2/2022-2-10.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ine:journl:v:55:y:2022:i:64:p:160-174

Access Statistics for this article

Romanian Journal of Economics is currently edited by Institute of National Economy

More articles in Romanian Journal of Economics from Institute of National Economy Contact information at EDIRC.
Bibliographic data for series maintained by Valentina Vasile ().