An Assessment of the Effect of Risk Management Committee on The Financial Performance of Deposit Money Banks

Abstract

This study seeks to investigate the effect of Risk Management Committee (RMC) on the financial performance of Deposit Money Banks (DMBs) in Nigeria. Financial performance is judged to be a critical aspect of any organization and thus plays a pivotal role in determining the success and sustainability of such organizations. The study spanned from 2012 to 2022. Data for the study was sourced from secondary source through the financial statements and annual reports of the 7 selected publicly listed DMBs in Nigeria. Correlation/OLS regression analysis techniques were employed in analyzing the data so as to measure the relationship between the variables and effect of RMC indicated by its size, independence and meetings on financial performance of DMBs indicated by ROA and ROE. Findings revealed that RMC size has significant effect on financial performance of DMBs with a mean value of 0.0172 and p – value of 0.021. Furthermore, RMC independence and meetings with the mean value of -0.0049 and -0.0063 respectively were found to affect financial performance of DMBs negatively and insignificantly. The study recommends increasing number of women in the RMC and regular hosting of meetings to fulfil company’s objectives and improve its financial performance. Additionally, practitioners and policy formulators need to pay specific attention to RMC size, frequency of meetings and independent boards as a concern in building robust risk management committee.