BOARD GOVERNANCE AND LEVERAGE STRUCTURE ON THE PERFORMANCE OF DEPOSIT MONEY BANKS (DMBs) IN NIGERIA

This study investigated the impact of board governance and leverage structure on the performance of deposit money banks (DMBs) in Nigeria, using Return on Equity (ROE) and Earnings per Share (EPS) as performance indicators. The study focused on the relationship between board characteristics such as board size (BIS), board independence (BID), and leverage structure, represented by the debt-to-total assets ratio (LEV), with firm size as a control variable. The data used in this study were collected from the annual reports of eight Nigerian deposit money banks over the period from 2011 to 2022, producing 96 observations. The analysis was conducted using fixed and random effect models to determine the impact of the independent variables on performance. The findings revealed that board size had a significant and positive influence on EPS, indicating that larger boards contributed to better financial performance due to a diversity of expertise and more effective governance. However, board independence and leverage structure showed no significant impact on EPS. Similarly, board size and board independence demonstrated a positive relationship with ROE, but only board independence had a significant effect on ROE, suggesting that independent directors enhanced firm performance by providing stronger oversight and reducing agency costs. Leverage structure and firm size had positive but statistically insignificant effects on both EPS and ROE, implying that these variables did not play a substantial role in determining the financial performance of the sampled banks. These findings suggested that while board governance factors like board size and independence were important determinants of bank performance, leverage structure did not have a significant influence. The study contributed to the growing literature on corporate governance and its role in enhancing the performance of financial institutions in Nigeria.