Board Expertise and Firm Performance of Listed Deposit Money Banks in Nigeria
Abstract
This paper examined the effect of board expertise on financial performance of ten sampled commercial banks in Nigeria from 2013 to 2022. The regressor is board expertise measured by accounting expertise, managerial expertise, and legal expertise. The study included both firm size and financial leverage into the model as control variables. Data for the study were drawn from the annual reports of the sampled commercial banks within the reviewed periods. Meanwhile, the panel regression approaches was adopted since the variables exhibited both time series and cross sectional characteristics. The Hausman test confirmed that, the Random effect model is the most efficient model for the study. Further, accounting expertise, managerial expertise, and legal expertise exerted positive significant effect on sampled commercial banks in Nigeria. Consequently, the paper concludes that, accounting, managerial and legal expertise is major positive predictors of the financial performance (cum ROI) of sampled commercial banks within the reviewed periods. Hence, the paper submits that, directors with accounting and legal background should be given more opportunities to become members of the board room considering the instrumental roles they play in the Nigerian banking industry. Lastly, those at the management cadre should be given more opportunity to up-skill since managerial expertise serve as one of the most critical factors which influences the performance of the sampled commercial banks in a positive light.
