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Board Diligence and Asset Quality of Listed Deposit Money Banks in Nigeria

Author

Listed:
  • Onyeogubalu Ogochukwu Nkiru (PhD)

    (Department of Accountancy, Nnamdi Azikiwe University Awka.)

  • Akwuobi Bridget Udekwesili (PhD)

    (Department of Accountancy, Nnamdi Azikiwe University Awka.)

  • Okeke Onyekachi Nath (PhD)

    (Department of Accountancy, Nnamdi Azikiwe University Awka.)

Abstract

The study examined the effect of board diligence on the asset quality of listed deposit money banks in Nigeria. The study adopted an ex-post facto research design over the period 2015 to 2024. The population comprised thirteen listed deposit money banks on the Nigerian Exchange Group, with a sample size of twelve banks after excluding Unity Bank due to missing 2024 reports. Secondary data were collected from the annual reports of the selected banks, focusing on the number of board meetings as a measure of board diligence and the non-performing loan ratio as a measure of asset quality. Panel EGLS (Period Seemingly Unrelated Regression) was used to test the hypothesis at 1% significance level and correct for heteroskedasticity and cross-sectional dependence. The findings revealed that board diligence has a negative effect on asset quality, as an increase in the number of board meetings leads to higher non-performing loan ratios (β = 0.0056; p = 0.0000). In conclusion, frequent board meetings may not necessarily translate into improved asset quality, but may instead be a response to worsening loan conditions. The study recommended that boards of listed deposit money banks in Nigeria improve the effectiveness and quality of their meetings by ensuring that each session focuses on strategic oversight, timely risk assessment, and practical credit management decisions rather than frequent routine deliberations. Board members should be provided with adequate information and analysis before meetings to enable data-driven discussions that directly address emerging loan quality issues.

Suggested Citation

  • Onyeogubalu Ogochukwu Nkiru (PhD) & Akwuobi Bridget Udekwesili (PhD) & Okeke Onyekachi Nath (PhD), 2026. "Board Diligence and Asset Quality of Listed Deposit Money Banks in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 13(2), pages 2017-2029, February.
    • Handle: RePEc:bjc:journl:v:13:y:2026:i:2:p:2017-2029
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    References listed on IDEAS

    as
    1. Wasiu Abiodun SANYAOLU & Babatunde Titus ADEJUMO, 2020. "Board Diligence And Financial Performance: Evidence From Nigerian Deposit Money Banks," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(3), pages 161-169.
    2. Nisar Ahmad & Alena Sultan Mehmood & Muhammad Azeem & Fasial Ashraf, 2024. "Corporate Governance and Nonperforming Loans: Empirical Evidence from Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 6(2), pages 162-173.
    3. Wasiu Abiodun Sanyaolu & Babatunde Titus Adejumo & Idris Kadiri, 2020. "Board Diligence And Financial Performance: Evidence From Nigerian Deposit Money Banks," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 9(3), pages 145-160.
    4. Oleg Badunenko & Aristeidis Dadoukis & Giulia Fusi & Richard Simper, 2022. "The impact of efficiency on asset quality in banking," The European Journal of Finance, Taylor & Francis Journals, vol. 28(6), pages 596-620, April.
    5. Alex Adegboye & Stephen Ojeka & Kofo Adegboye & David McMillan, 2020. "Corporate governance structure, Bank externalities and sensitivity of non-performing loans in Nigeria," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1816611-181, January.
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