THE IMPACT OF BOARD SIZE ON SHAREHOLDERS’ WEALTH MAXIMISATION OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines the impact of board size on shareholders’ wealth maximisation of quoted
deposit money banks in Nigeria. The independent variables include board size, while shareholders'
wealth maximization is proxied by Economic Value Added (EVA). An ex-post facto research
design is employed, utilizing panel data regression analysis on financial statements of fourteen
(14) quoted deposit money banks in Nigeria from 2014 to 2023. Secondary data were sourced from
annual reports and relevant regulatory bodies, with multiple regression techniques used to test the
hypotheses. Findings revealed that board size has an insignificant negative influence on
shareholders’ wealth maximization. Therefore, the study recommended that given the negative
effect of Board Size on shareholders’ wealth maximization, it is recommended that firms adopt a
more streamlined board structure with an optimal number of directors. The focus should be on
ensuring that the board is large enough to provide diverse perspectives but not so large as to create
inefficiencies.