COPRPORATE BOARD CHARACTERISTICS AND PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The Global Financial Crisis (GFC) of 2007-2008 greatly affected the banking industry in particular in developed and developing nations of the world. It exposes vulnerabilities in banking profitability and many banks faced significant losses, weakening capital bases and declining profitability, which affected broader financial stability. The crisis was attributed to the failures in governance, especially in regard to boards of directors. This study explores the effect of corporate board characteristics (board size board independence and board gender) on profitability (Profit after Tax) of Deposit Money Banks (DMBs) listed on Nigeria Exchange Group between the periods of 2009-2022. From a population of fourteen listed DMBs, thirteen that met the purposive sampling technique criterion considered were used. Pertinent secondary data in the form of balanced panel data were collected from relevant database of the sampled banks. The Feasible Generalized Least Square (FGLS) regression was used as the main regression technique, having carry out diagnostic tests and serial correlation, heteroskedasticity and contemporaneous correlation problems identified. The study found that board size, board independence and board gender had a positive and statistical significant effect on profitability of listed DMBs in Nigeria. The study recommends for an optimal board size that balances diversity of expertise with efficient decision-making. Regulatory authorities ensure compliance with directors’ independence standards, by making sure that the board composition aligns with regulatory and corporate governance standards. Lastly, a clear guidelines and initiatives be put in place to encourage the inclusion of women at various levels of board leadership.