It is crucial to remember that businesses all over the world are continuously grappling with issues brought on by bad corporate governance, including subpar risk management, commercial fraud, and erroneous financial reporting. These difficulties persist despite the existence of a corporate board of directors, whose responsibility it is to guarantee that business organizations are handled ethically.

In the early 2000s, discussions about board diversity in the Nigerian business sector began to pick up steam and get a lot of attention.

This study uses five conventional Nigerian banks (First Bank PLC, Unity Bank PLC, Fidelity Bank PLC, UBA Bank, and Stanbic Bank) as a case study to examine the impact of board diversity on the financial performance of banks. In order to lead the study, four aspects of board diversity—female directors, financial competence, board size, and foreign members—were examined to determine their specific impact on the financial performance of the chosen institutions. The impact of each of these factors on the financial performance of the five listed banks was then examined.

All five of these Nigerian commercial banks were used as the study’s target population over a 10-year period, and a causal research design was taken into consideration (2010-2020). For the ten-year period 2010-2020, information on the board profile was acquired using a checklist and bank financial data. The information utilized was taken from the banks’ financial statements and audit reports for the relevant years, and it was then simply regression-analyzed.

The results of the study conclusively shown that the success of the bank’s finances is positively correlated with the nationality, level of financial experience on average, gender, and size of the board of directors. Additionally, it emphasizes the need of board diversity as a crucial component of financial performance for all businesses, not just financial institutions. The performance of the commercial banks may benefit from any measures done to enhance the directors’ selection in terms of their gender, average experience duration, gender, and educational level.  One of the findings indicated that there is still a shockingly low percentage of women serving on the boards of the chosen financial institutions, leading to the conclusion that there remains a gender issue with Nigerian banks’ hiring practices for female directors. These results could be explained by the fact that most boards are headed by men and that the few women who serve on them might not have an effect on the bank’s strategy.

Additionally, it has been noted that few foreigners serve on the boards of directors of Nigeria’s major banks, and that board member nationality had little bearing on the bank’s financial success. Instead, director experience and board size had a substantial influence on banks’ performance.



1.1 Introduction and Statement of Research Problem.

Does the diversity of a board have an impact on how well a company performs? A significant topic of research for corporate ownership and control is the response to this query. The board acts as a liaison between owners and management and is tasked with safeguarding the interests of shareholders and other stakeholders as well as controlling and supervising the making of crucial decisions and keeping an eye on the business’s operations to ensure that it complies with the law. Insisting on rigorous adherence to corporate principles and objectives with a focus on shareholders’ interests also affects how managers behave (Madhani,.

In order to make the board less homogeneous, board diversity, according to Langevoort (2016), refers to having a wide variety of people who differ from one another in terms of demographics, professional backgrounds, abilities, and experiences. According to Wang and Cliff (2009), board diversity refers to the proportion of women and people of color on a board (who are not Anglo-Australians).

According to published studies, diversity improves a firm’s success (Marimuth and Allen,2008: Allen, Gail and Wheatley, 2008). According to Raheja (2015), having a diverse board of directors offers several benefits, including greater talent utilization, more efficient decision-making, and enhanced investor relations and corporate reputation by portraying the firm as a good corporate citizen.

There has been a lot of literature done, and scholars have questioned whether or not board diversity is actually related to financial performance. Using Tobin’s Q, a gauge of financial execution, Fan (2012) claimed that board diversity as it relates to gender of the board has a favorable link with financial success.

However, when looking at the boards of Italian businesses that were listed on the Italian Stock Exchange between 2006 and 2008, Schwizer et al. (2012) found no statistically significant correlation between the number of female directors on those boards and the financial performance of the companies. In a related research done with agricultural organizations in Nigeria, Mwatsuma, Muchiri, and Mrope (2012) discovered a bad correlation between the financial success of these organizations and the number of board members.

 Prihatiningtias (2012) emphasized that gender diversity has both good and bad affects on how the firm is run financially. Tobin’s Q and Return on Assets (ROA) were used to measure financial success. According to the study, gender diversity adds additional conflict resolution expertise to assist settle disputes that develop among board members. In the same breath, various life experiences and viewpoints result in ongoing disputes and confrontations between the genders in the board.

This study was born out of a number of issues. The banking sector in Nigeria has a variety of challenging problems, including a dearth of effective regulatory frameworks to protect all categories of business stakeholders. The majority of corporate businesses in Nigeria, according to the Central Bank of Nigeria, have not yet developed a healthy corporate culture (CBN Bulletin, 2014). According to a survey by the Security and Exchange Commission (SEC), 40% of registered firms, including banks, have a recognized code of corporate governance that was published in 2003. The systemic problems, including flagrant insider abuses, sizable insider-linked non-performing loans, misleading reporting, and non-compliance with regulatory obligations, were primarily brought on by a disregard for the fundamental governance principles. The CBN and the Bankers Committee collaborated to develop a Code of Corporate Governance, which took effect on March 1, 2006, in order to close this gap in the corporate sector and increase competitiveness (and was amended in 2009). The code was followed with an emphasis on important components such as equity ownership, organizational architecture, and board member quality in order to assure best practices and improve self-regulation. Another problem is the multi-ethnic and multi-cultural issues, which have greatly widened the economic and educational divide between the population, particularly between men and women (CBN Bulletin.