EFFECT OF CHIEF EXECUTIVE OFFICER CHARACTERISTICS ON FINANCIAL DISTRESS OF LISTED DEPOSIT MONNEY BANKS IN NIGERIA

Abstract

This study examines the effect of chief executive officer (CEO) characteristics on financial distress among listed deposit money banks in Nigeria. The study was anchored on human capital theory, upper echelons theory, and feminist theory. A correlational research design was adopted within the positivist paradigm. The population comprised 14 deposit money banks listed on the Nigerian Exchange Group as at 31 December 2024, from which 13 banks were selected using the census sampling technique after excluding Union Bank Plc due to delisting. The study covered 2008–2024 and utilised 208 bank-year observations obtained from annual reports and accounts based on unbalanced data. Data were analysed using Stata 17, employing descriptive statistics, Pearson correlation, variance inflation factor (VIF), link test, groupwise hetroskedasticity and Panel-Corrected Standard Errors (PCSE) regression. The findings reveal that CEO tenure has a significant positive effect on financial distress, suggesting that prolonged CEO tenure may increase managerial entrenchment and financial vulnerability. CEO female gender has a significant negative effect on financial distress, indicating that female-led banks tend to experience lower financial distress. Similarly, CEO founder status has a significant negative effect on financial distress, supporting the view that founder-specific knowledge and commitment may enhance financial stability. The study concludes that CEO characteristics significantly influence financial distress and recommends effective CEO succession planning, inclusive executive appointments, strengthened board oversight, and robust governance mechanisms to promote financial stability among listed deposit money banks in Nigeria.