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Research Article Open access CC BY 4.0

Board Attributes and Credit Risk Exposure of Listed Deposit Money Banks in Nigeria: The Moderating Effect of Risk Committee Size

Maryam I. Muhammad, Yahaya Tukur, Ishaya J. Dabari, Bilyaminu Y. Hanga

Journal of Economics, Management and Trade · pp. 99–112 · Published 2 Jun 2023

10.9734/jemt/2023/v29i81118

Abstract

Aim: This study examined the moderating effect of Risk Committee Size on the relationship between board attributes and Credit Risk Exposure of listed Deposit Money Banks in Nigeria. Study Design: This study adopted ex-post facto research design. Place and Duration of Study: Department of Accounting and period 2009-2019. Methodology: Panel regression technique was used, Stata 13 was adopted as tool for the data analysis. Secondary source of data was employed and were obtained from the annual reports and accounts of the banks over the period. Results: The findings reveal that, board size has significant effect on credit risk exposure of banks before and after moderation. However, moderating board attributes revealed that board size and board diligence drive down the credit risk exposure of banks. Among the important policy implications is that the variables used suggest that there is continuous need by CBN to encourage and enforce the full application of corporate governance codes by banks in order to reap the full benefit of compliance. Conclusion: Based on the findings, this study concludes that board size is associated with less credit risk exposure, while high number of board size do not guarantee reduction in credit risk exposure of banks. Recommendation: It is therefore recommended amongst others that the number of board size should be increased alongside increase in the number of risk committee members to help reduce the risk exposure of banks in Nigeria.

Board attributes risk committee size credit risk exposure

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