BOARD COMMITTEE CHARACTERISTIC AND BANKRUPTCY RISK OF LISTED DEPOSIT MONEY BANKS IN NIGERIA AND SOUTH AFRICA
Keywords:
Bankruptcy Risk, Remuneration Committee, Risk Management CommitteeAbstract
The study ascertained the effect of board committee on bankruptcy risk in deposit money banks in Nigeria and South Africa. The specific objectives are to: assessed the effect of remuneration committee on bankruptcy risk of deposit money banks in Nigeria and South Africa; and evaluated the effect of risk management committee on bankruptcy risk of deposit money banks in Nigeria and South Africa. This study adopted the ex-post facto research design. A sample of eight deposit money banks, each from the two countries was purposively selected while other banks were inevitably excluded for incomplete data. The data were extracted from the annual reports and accounts of the selected banks in Nigeria and South Africa. The panel data were analyzed with descriptive statistics, and inferential statistics using Pearson correlation, and panel regression analysis. The study indicated that the remuneration committee had a negative and insignificant effect for Nigerian deposit money banks, while that of South African showed a negative and significant effect on bankruptcy risk. The study revealed that the risk management committee had a positive and significant effect for Nigerian deposit money banks, while the South African showed a negative and significant effect on bankruptcy risk. Based on the findings, The remuneration committee is recognizing the significance of growth and profitability of a bank, there is need for both countries to focused on this committee of their banks, hence the committee can influence executive behavior by structuring compensation that balance short-term and long-term goals, potentially reducing excessive risk-taking that could need to bankruptcy.
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