Board Characteristics and Financial Performance of Deposit Money Banks in Nigeria: Evidence from the Post-IFRS Period

Abstract

This study examines the influence of board attributes on the financial performance of quoted deposit money banks in Nigeria over the post-International Financial Reporting Standards (IFRS) period from 2012 to 2023. Drawing on agency theory, the study investigates how board size, board independence, board gender diversity, and board financial expertise influence bank performance, measured by return on assets (ROA). Using panel data from nine listed deposit money banks and employing robust Ordinary Least Squares estimation alongside diagnostic and robustness tests, the study provides recent empirical evidence from Nigeria’s banking sector. The results indicate that board size, independence, and gender diversity do not exert a statistically significant effect on ROA. In contrast, board financial expertise is found to have a negative and statistically significant effect on financial performance, suggesting that excessive concentration of financially expert directors may be associated with conservative decision-making and reduced profitability. These results underscore the context of corporate governance mechanisms in emerging economies and suggest that board composition alone may not guarantee improved bank performance. The study contributes to the corporate governance literature by jointly examining multiple board attributes within a single framework and offers policy-relevant insights for regulators, bank management, and investors concerned with board effectiveness in the Nigerian banking sector.