Audit Committee Characteristics and Corporate Governance Disclosure of Nigerian Deposit Money Banks

Aims: The paper examines the extent to which audit committee characteristics influence corporate governance disclosure level in the Nigerian deposit money banks. The characteristics examined are frequency of meetings, independence, financial literacy and gender diversity.

Study Design: The study adopts cross sectional research design.

Place of Study: The study was carried out in Nigeria.

Methodology: The paper derives data from annual reports of thirteen deposit money banks for the period 2013 to 2015 and based on the Code of Corporate Governance for Public Companies issued by the Securities and Exchange Commission of Nigeria and Code of Corporate Governance for Banks in Nigeria post consolidation constructed a corporate governance disclosure index using content analysis method. The data were analyzed using Stata 12. It formulated and tested four hypotheses employing the ordinary least square method of multiple regressions.

Results: The result shows a positive but insignificant relationship between corporate governance disclosure level and frequency of meetings. The paper documents a negative and statistically insignificant relationship between corporate governance disclosure level and financial literacy and independence of the audit committee. Gender diversity of the audit committee on the other hand is significantly and negatively associated with corporate governance disclosure level.

Conclusions: It is recommended that audit committees of deposit money banks should increase the meeting frequencies with discussions focusing more on corporate governance issues especially disclosures. It is further recommended only non-executive directors who are independent both in mental attitude and appearance are elected as representatives of board of directors. Female membership of the audit committees of deposit money banks should be reduced.