BOARD OF DIRECTORS' INDEPENDENCE ON BANKRUPTCY RISK OF DEPOSIT MONEY BANKS IN NIGERIA

The study ascertained the effect of board of directors’ independence on bankruptcy risk in deposit money banks in Nigeria. Ex-post facto research design was adopted for the study. A sample of eight deposit money banks was purposively selected while other banks were inevitably excluded for unavailability of data. Data were generated from the annual reports and accounts of the selected banks in Nigeria. Panel data were analyzed with descriptive statistics, and panel regression analysis was used to test the hypothesis. The study shows that the board of directors’ independence had a negative and significant effect for Nigerian deposit money banks, while that of South African showed a positive and has a significant effect on bankruptcy risk. Based on this, there is need to strengthen the board of director’s independency, such as having more independent directors so as to monitor management decisions and prevents opportunistic behaviour, reducing the risk of bankruptcy.