Paper Title
Risk Management Committee Characteristics and Market Performance: Empirical Evidence from Listed Financial Service Firms in Nigeria
Abstract
Recently, there is an increased demand from various corporate stakeholders on the need for public companies to have risk management frameworks as well as a stand-alone risk management committee in order to mitigate risks and simultaneously improve performance. Consequently, based on the requirement of the revised Nigerian Code of Corporate Governance (NCCG) 2011 on risk management structure, this study examines the impact of risk management committee characteristics (risk management committee size, risk management committee composition, risk management committee meeting) on the market performance (market-to-book value ratio, (MTB)) of listed financial service firms in Nigeria. In the quest to achieve the objective of this study, data were obtained from a sample of 45 financial service firms (banks and nonbanks) for the period of 2012 to 2016. However, the Panel Corrected Standard Errors (PCSEs) regression model is used in testing the hypotheses developed in this study. In essence, the regression result reveals that risk management committee size has a significant, but negative impact on firm performance, while risk management committee composition and risk management committee meeting have a significant positive effect on firm performance as expected by their hypotheses. Thus, the finding of this study has significantly contributed to the regulators of corporate governance code in Nigeria alongside shareholders, and corporate managers. The study concludes by offering policy recommendation.
Keywords - Market-to-book value ratio, Risk management committee composition, Risk management committee meeting, risk management committee size.