The Interplay of Risk Management and Tax Strategies: An Analysis of Nigerian Companies

Jide Sunday Oyewole and David Segun Oluwagbemi
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Jide Sunday Oyewole: Faculty of Education, Accounting Education/Ekiti State University, Nigeria.
David Segun Oluwagbemi: College of Education, Oral Roberts University, Tulsa, Oklahoma, USA.

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Abstract: This research explores how risk governance mechanisms to influence tax planning behaviour in the context of the Nigerian publicly traded corporations, which fills a literature gap that exists in the literature on emerging markets and multi-sector evidence. Particularly, it evaluates the effects of characteristics of risk committees size, accounting experience, and independence on the effective tax rates. It is based on the risk management theory and is an ex-post facto study which uses secondary panel data of the annual financial statements of fifty-four (54) Nigerian publicly traded companies in ten sectors over the period between 2013 and 2022. The analysis involves the use of descriptive statistics, correlation analysis, and panel regression (Generalized Least Squares Random Effects). The findings show that tax aggressiveness has a negative and statistically significant negative correlation with risk committee size (t-value = -7.074, p < 0.05). On the same note, accounting experience in the risk committee reflects negative and significant effect (t-value = -21.365, p < 0.05), meaning that higher financial competence results in the adoption of conservative tax practices. Moreover, independence of risk committees is positively related to effective tax rate (t-value = 16.863, p < 0.05), which means that the greater the independence, the less the tax avoidance. The research finds the existence of bigger, more autonomous risk committees and excellent accounting skills, which is linked to less aggressive planning of taxes. These results can be valuable information to regulators, corporate boards, as well as policy makers in Nigeria who are interested in enhancing governance frameworks to enhance ethical tax practices as well as financial disclosure.

Date: 2026-02-10
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Published in Journal of Global Economics, Management and Business Research, 2026, 18 (1), pp.299-311

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