CORPORATE GOVERNANCE MECHANISMS AND FINANCIAL PERFORMANCE IN NIGERIAN DEPOSIT MONEY BANKS (DMBS)

This study investigates the impact of corporate governance mechanisms on the financial performance of deposit money banks (DMBs) in Nigeria, with particular attention to how board-level attributes such as Board Control (BC), Board Activities (BA), Existence of Key Committees (ECOM), and Board Gender Diversity (BGD) affect financial performance measured by Tobin’s Q. The study is underpinned by the Agency Theory, which emphasizes the role of corporate governance in mitigating conflicts between management and Shareholders, and Stakeholder Theory, which highlights the broader implications of inclusive and transparent governance. The study employed an ex-post facto research design using secondary panel data collected from five top-tier international commercial banks in Nigeria namely; First Bank, Zenith Bank, Guaranty Trust Bank, Access Bank, and United Bank for Africa, over a 10-year period (2014–2023). Data were sourced from annual reports, financial statements, and the Central Bank of Nigeria (CBN) statistical bulletins. The judgmental sampling technique was used to select the banks based on their listing status and systemic importance. Descriptive and inferential statistics, including panel regression analysis, were used to evaluate the relationship between governance variables and performance indicators. The findings revealed that all four governance mechanisms significantly influenced firm performance. Board Control positively and significantly affected Capital Adequacy (β = 0.278, p = 0.012) and Tobin’s Q (p = 0.012), indicating enhanced oversight strengthens capital buffers and market confidence. Board Activities had a strong positive effect on ROE (β = 0.315, p = 0.006) and Tobin’s Q (p = 0.006), highlighting the value of active board engagement. The Existence of Important Committees was positively related to Earnings per Share (β = 0.198, p = 0.045) and Tobin’s Q (p = 0.045), confirming the importance of structured governance. Lastly, Board Gender Diversity significantly improved ROA (β = 0.374, p = 0.001) and Tobin’s Q (p = 0.001), underscoring the strategic value of inclusive boards. The study concludes that effective board governance is crucial for driving financial stability, profitability, and performance in Nigerian deposit money banks. It recommends the institutionalization of governance reforms that promote independent oversight, active engagement, committee functionality, and gender inclusivity. Regulatory bodies like the CBN and Financial Reporting Council should intensify their monitoring and policy interventions to improve board structure and performance. Moreover, banks should invest in continuous board training to enhance governance responsiveness in an evolving financial environment.