BOARD OF DIRECTORS ATTRIBUTES AND FIRM FINANCIAL PERFORMANCE

ABSTRACT

This study examined how board of directors attributes affect the financial performance of deposit money banks (DMBs) in Nigeria, specifically focusing on board size, board gender diversity, and board independence. The research utilizes an ex-post facto research design, examining secondary data from the audited financial statements of 10 DMBs listed on the Nigerian Exchange Group (NGX) over a six-year period from 2017 to 2022. The total population comprises 27 banks, and a sample of 10 banks was selected for detailed analysis. Data analysis was conducted using Ordinary Least Squares (OLS) regression in SPSS version 23, with earnings per share (EPS) as the measure of financial performance. The study finds that board gender diversity and board independence have a significant positive impact on financial performance, suggesting that diverse and independent boards contribute positively to the financial outcomes of banks. Conversely, board size does not significantly influence financial performance, implying that merely increasing the number of directors does not enhance financial outcomes. Firm size, used as a control variable, also shows a significant positive effect on financial performance. The study recommends that banks should promote gender diversity on their boards through policies and programs supporting female leadership. Ensuring a significant proportion of independent directors is crucial for improving financial performance, which can be achieved through regulatory guidelines or internal policies. Although board size itself is not a determinant of better performance, maintaining an optimal board size that supports effective governance is essential. Lastly, banks should focus on growth strategies that expand their operations and market presence to positively impact financial performance. Implementing these recommendations can strengthen governance structures and enhance the financial stability of deposit money banks in Nigeria.