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Board Diligence And Financial Performance: Evidence From Nigerian Deposit Money Banks

Author

Listed:
  • Wasiu Abiodun Sanyaolu
  • Babatunde Titus Adejumo
  • Idris Kadiri

    (Crescent University, University of Benin, Nigeria
    Osun Debt Management Office in Osogbo, Nigeria
    University of Benin, Nigeria)

Abstract

The study examined the effect of board diligence on financial performance of deposit money banks (DMBs) listed on the Nigerian Stock Exchange. Data of the 10 selected DBMs were obtained from their annual financial statements from 2012 to 2018 using an ex post facto research design and purposive sampling technique. The data were analysed using inferential statistics and the hypothesis was tested using Generalised Method of Moment (GMM). It was found that board diligence has significant negative effect on financial performance of Nigerian listed DBMs. As regards the controlled variables, only capital adequacy and firm size were found to positively and significantly influence financial performance. Liquidity ratio was found to have direct but no significant effect on financial performance while nonperforming loan negatively and insignificantly affect financial performance. The study concludes that board diligence reduces financial performance. It is therefore recommended that preference should be given to the quality of board meetings and not the frequency of such meetings; and that issues that have implications on performance should be given utmost attention at board meetings.

Suggested Citation

  • 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.
    • Handle: RePEc:cpn:umkcjf:v:9:y:2020:i:3:p:145-160
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    References listed on IDEAS

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    1. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    2. Wasiu Abiodun Sanyaolu & Trimisiu Tunji Siynbola & Gbadebo Tirimisiyu Ogunmefun & Afeez Babatunde Makinde, 2019. "Determinants Of Profitability Of Nigerian Deposit Money Banks," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 17(1), pages 47-62, May.
    3. Faleye, Olubunmi & Krishnan, Karthik, 2017. "Risky lending: Does bank corporate governance matter?," Journal of Banking & Finance, Elsevier, vol. 83(C), pages 57-69.
    4. Ntim, Collins G., 2011. "The Impact of Corporate Board Meetings on Corporate Performance in South Africa," MPRA Paper 45814, University Library of Munich, Germany.
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    Cited by:

    1. 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.

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