Board Heterogeneity and Asset Quality of Listed Deposit Money Banks in Nigeria (Academic research)

Summary

• The study uses a balanced panel of 110 bank-year observations from eleven listed deposit money banks, covering 2015 to 2024.p.1
• An LLPA value of 1.0 (or 100%) indicates optimal provisioning accuracy.p.4
• Female directors constituted approximately 24.55% of board membership on average.p.9
• Board tenure diversity has a coefficient of 5.306962 and probability 0.0123, the only significant board dimension.p.11
• Board professional diversity has a positive coefficient of 3.931744 but is not significant, with probability 0.1923.p.11

Key insights

1. Asset quality is measured by loan loss provisioning accuracy, the ratio of provisions in year t to net write-offs in year t+1.p.4
2. On average the LLPA exceeded the 1.0 benchmark, with a mean of 1.283096.p.8
3. Independent directors represented approximately 28.97% of board membership on average.p.9
4. Board tenure diversity has a positive and statistically significant relationship with LLPA, with probability 0.0123.p.11
5. Board age diversity shows no statistically significant relationship with LLPA, with probability 0.4084.p.12
6. Board professional diversity is positively but insignificantly related to LLPA, with probability 0.1923.p.11
7. The regression R-squared is 0.101938, indicating limited explanatory power.p.10