BOARD EDUCATION, DIRECTOR'S AGE AND EARNINGS MANAGEMENT OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Utilizing a complete nine-year dataset, this research investigates the link among age diversity among directors, board education qualifications, and earnings management in the context of Nigerian listed deposit money banks. The study was conducted from 2013 through 2021, spanning nine years. Agency theory serves as the underpinning framework for this study. Regression analysis yields strong evidence that the age distribution of directors and the board's educational background impact the profit management of these firms. Specifically, earnings management significantly decreases when there are more board members with formal education, particularly in the financial and accounting sectors. Furthermore, a broad age group on the board may hinder profit management due to age-related risk aversion and varied experience. This study sheds important light on the crucial role that board characteristics play in shaping profit management strategies used by Nigerian banks. It also argues that, to improve governance, banks should encourage the appointment of individuals with a background in finance to their boards. Future studies may enhance these and other aspects, given its limitations, including observational data and a sector-specific emphasis, to provide a more thorough understanding of the dynamics of earnings management. This research provides practitioners and policymakers with guidance for efficient corporate governance in Nigerian deposit money firms by highlighting the critical role that board composition plays in profit management techniques.