EFFECT OF RISK MANAGEMENT COMMITTEE CHARACTERISTICS ON FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS (DMBs) IN NIGERIA
Keywords:
Risk Management, Committee Characteristics, Financial Performance, DMBs, Agency TheoryAbstract
The Nigerian banking sector is experiencing decline in financial performance due to increasing growth of systematic and unsystematic risk problems which led to collapse of many banks in the country. This study examined the effect of risk management committee characteristics and financial performance of listed deposit money banks (DMBs) in Nigeria for the period 2007– 2022. Specifically, the study seeks to find if risk management characteristics (proxy by committee size, committee independence, committee gender diversity, committee financial expertise, committee’s meeting and committee members’ dual engagement) has any influence on the performance of listed DMBs in Nigeria. The study adopted census sampling of the adjusted population of 13 DMBs. Secondary panel data were collected from the annual reports and accounts of the banks and analyzed using panel corrected standard error regression technique. The results revealed that risk management committee size has positive insignificant effect on financial performance of the DMBs, committee members’ multiple engagements have negative significant effect but committee’s independence, gender diversity, financial expertise and meetings have positive significant effect on financial performance of the DMBs. Based on the findings, it was concluded that overall, risk management committee characteristics have significant impact on financial performance of listed DMBs in Nigeria. It is recommended among others that the listed DMBs should avoid large risk management committee size since it does not have significant impact on their financial performance and avoid engaging committee members in other committees since it has negative effect on financial performance while prioritizing committee independence, gender diversity, financial expertise and meetings which have positive significant impacts on their financial performance.Downloads
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