Board Composition, Audit Committee and Financial Performance of Deposit Money Banks in Nigeria

Efficient and effective board and audit committee in a company plays the role of ensuring the company performs very well in order to maximise the wealth of shareholders. This study therefore attempts to unearth the relationship between board composition, audit committee, and financial performance. ROA and EPS were used to proxy financial performance. The study used already existing (secondary) data from 2010 to 2019, hence the choice of the ex post facto design. Eight banks were selected and analysis was made on the data collected using correlation (Pearson). The study found insignificant relationship of 0.070 and 0.069 between board composition and ROA as well as EPS. While the correlation was negative and very weak between board composition and ROA, it was positive though still very weak with EPS. Also, the result unveils an insignificant relationship of 0.288 and 0.641 between audit committee and ROA as well as EPS with very week positive correlation with both. Recommendations made were that composition of the board should comprise of few members in order to increase effectiveness, efficiency and full participation that is sufficient to actualize the aim of wealth creation; board should wake up to their responsibility and strive to increase earnings by pursuing objectives and taking decisions targeted at enhancing the earnings; audit committee should be embraced, strengthened, meet frequently to check compliance and also ensure they improve their monitoring capacity; and audit committee independence level should be increased, believing that this will ensure better objectivity, transparency and monitoring for better financial performance. The study came to a conclusion and agreed to the various scholars that found a mixed relationship and correlation between board composition, audit committee and financial performance.