Board Composition and Firm Performance of Listed Deposit Money Banks in Nigeria.

Abstract

Banks world over are expected to operate within acceptable standards of governance for consistent performance operations. They run heavily on customer deposits, which is confidence – driven. Since the quality of governance is critical to winning and retaining customer confidence and patronage, the imperative for good governance practices in banks cannot be overemphasized. The aim of this study is to empirically explore the relationship between board composition and firms performance of listed deposit money bank in Nigeria. Data on different variables of board composition and firm market value from 2011-2021 were collected from the annual financial reports of all the fourteen quoted commercial banks in Nigeria. ordinary least square regression analysis, descriptive statistics, Hausman specification test, likelihood ratio test, panel stationarity test, Lagrange multiplier test, lag length selection criterion and panel auto-regressive distribution lag(brand test were used in analyzing the data. The empirical studies indicate that board composition significantly relate to firm performance, explaining about 85.1% of the total variation firm market value. The study empirically conclude that board composition contribute significantly to  firm performance and recommends that strong and mandatory corporate governance structure should be put in place to ensure that board of directors consist mostly of members that are independent of the firm, both directly and indirectly.