Board Operational Strategies and Shareholders’ Compensation in Nigerian Banking Industry

Abstract

There have been several studies on operational strategies
employed by boards across the globe but most of the studies did not see how these strategies could enhance shareholders’ compensation. Thus,  the objective of the study is to investigate the impact of board operational strategies on shareholders’ compensation in the Nigerian banking  industry. The study employs ex-post facto research design and secondary data collected from the annual reports of the selected banks- Access Bank,  Sterling Bank, First City Monument Bank (FCMB), Eco Bank, Stanbic IBTC, United Bank for Africa, Wema Bank, Zenith Bank, First Bank, and  Guarantee Trust Bank. The findings from the multiple regression reveal that Audit and HR committees have significant effect on dividend per share while Risk Management, and Credit & Finance committees do not. The findings further show that Risk Management, Audit, HR, and Credit& Finance  committees do not have significant effect on earnings per share. The study concludes that operational strategies do not have significant effect on  earnings per share. The study suggests that the quality and capability of Credit and Finance committee members should be increased so that the  owners of banks will continue to experience high rewards on their investments in the banking industry. Also, there is the need to review job  descriptions of Risk Management, Audit and HR committees so as to empower them to influence shareholder compensation in the industry.