Characteristics of Risk Management Committee and the Earnings Capacity of Listed Deposit Money Banks in Africa


Authors : Igbru Oghenekaro; Ukachi Maximowitz Tochukwu; Ike Odinaka Miriam

Volume/Issue : Volume 10 - 2025, Issue 5 - May

Google Scholar : https://tinyurl.com/3z5x5dhm

DOI : https://doi.org/10.38124/ijisrt/25may706

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Abstract : This study investigates the relationship between the characteristics of the Risk Management Committee (RMC) and the earnings capacity of listed deposit money banks in Africa. An ex-post facto research design was employed using secondary data from banks in Nigeria, Kenya, and Zimbabwe that had published financial statements consistently from 2013 to 2022. A purposive sampling technique was used to select eight banks listed on the respective national stock exchanges of the three countries. The analysis employed descriptive statistics, correlation matrices, and panel regression models. The findings show that RMC size has a statistically significant negative effect on earnings capacity at the 5% level, while RMC independence has a significant positive effect at the 1% level. However, RMC gender diversity, accounting and finance expertise, and meeting frequency did not exhibit statistically significant effects (p > 0.05) on earnings capacity. Based on these results, the study recommends that shareholders adopt a moderate approach when determining RMC size and prioritize the inclusion of non-executive directors. Greater RMC independence, particularly through the appointment of non-executive members, is suggested to enhance oversight and promote stronger financial performance among African banks.

Keywords : Earnings Capacity, Risk Management Committee, Independence, Gender Diversity, Finance Expertise, Meeting Frequency, Committee Size.

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This study investigates the relationship between the characteristics of the Risk Management Committee (RMC) and the earnings capacity of listed deposit money banks in Africa. An ex-post facto research design was employed using secondary data from banks in Nigeria, Kenya, and Zimbabwe that had published financial statements consistently from 2013 to 2022. A purposive sampling technique was used to select eight banks listed on the respective national stock exchanges of the three countries. The analysis employed descriptive statistics, correlation matrices, and panel regression models. The findings show that RMC size has a statistically significant negative effect on earnings capacity at the 5% level, while RMC independence has a significant positive effect at the 1% level. However, RMC gender diversity, accounting and finance expertise, and meeting frequency did not exhibit statistically significant effects (p > 0.05) on earnings capacity. Based on these results, the study recommends that shareholders adopt a moderate approach when determining RMC size and prioritize the inclusion of non-executive directors. Greater RMC independence, particularly through the appointment of non-executive members, is suggested to enhance oversight and promote stronger financial performance among African banks.

Keywords : Earnings Capacity, Risk Management Committee, Independence, Gender Diversity, Finance Expertise, Meeting Frequency, Committee Size.

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