THE IMPACT OF BOARD COMPOSITION OWNERSHIP STRUCTURE ON THE DIVIDEND PAYOUT POLICY OF LISTED NIGERIAN BANKS
Abstract
The ownership structure is the distribution of a company’s stock among its major shareholders. A dividend policy is an engine tool to control and reduce the conflicting interests between investors and managers. The board composition and ownership structure of banks plays a crucial role in the effectiveness of their corporate governance practices. Agency issues arising from a divergence between shareholder interests and managerial objectives can cause misaligned incentives and result in questionable dividend policies that benefit managers rather than shareholders overall, this drives the study to examine the significant impact of board size, gender diversity, board independence, institutional ownership, and managerial ownership on the dividend payout policy of listed deposit money banks in Nigeria. The study adopted an ex-post facto research design by collecting secondary data on board composition, ownership structures, and dividend payout variables of five selected bank deposit banks in Nigeria which was obtained from the Nigerian Stock Exchange financial statement from 2019 to 2024. The secondary data were analyzed with SPSS, using descriptive Analysis, Correlation, and Multiple Regression Analysis. The study revealed that Board Independence and Managerial ownership have a significant impact on the dividend payout policy while board size, gender diversity, and institutional ownership do not have a significant impact on the dividend payout policy of the five selected deposit money banks in Nigeria which is a piece of clear evidence from the study that the deposit money banks are doing well in their shares investment as executive management boards The study recommends among others, that board executives as well as the government, should invest more to dilute the ownership structure, which is defined by manager-ownership and institutional owners and bank decision-makers should also strive to increase the board size and the proportion of female executives to help drives dividend payout policy.
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