Board Committee Diversity and the Value Relevance of Accounting Information of Nigerian Banks

This study examined whether board committee diversity influenced the value relevance of accounting information in listed Nigerian commercial banks. Using an ex-post facto research design, the study analyzed data from the eight banks that have international authorization licenses between the period, 2018 – 2022. Board committee diversity was measured across three key committees: risk, remuneration and nomination and governance committees respectively; while share price was adopted as the proxy for value relevance. A census sampling approach was adopted, and the outcome of the diagnostic tests led to the adoption of the contemporaneous correlation technique as the appropriate estimation method for the test of the study’s hypotheses. The results show that gender diversity within risk committees does not significantly influence the value relevance of accounting information. However, diversity in nomination and governance committees, as well as remuneration committees, exerts a significant positive effect on the value relevance of accounting information of listed commercial banks with international authorization license. These findings highlight the varying roles of board sub-structures in enhancing the informativeness of financial reports. The study recommends among others that Regulatory bodies such as the Financial Reporting Council of Nigeria (FRCN) and the Central Bank of Nigeria (CBN) should strengthen monitoring mechanisms to ensure that board committees; especially nomination and governance as well as remuneration committees, are constituted with appropriate levels of diversity and competence.