EFFECT OF BOARD CHARACTERISTICS ON CASH HOLDING OF LISTED COMMERCIAL BANKS IN NIGERIA.

Abstract

This study examines the effect of board characteristics on cash holding in listed commercial banks in Nigeria using a longitudinal research design. The study analyzes data from 15 commercial banks listed on the Nigerian Exchange Group (NGX) as of December 31, 2024. Board characteristics considered include board size, board independence, and board meetings, while firm size is included as control variables. Secondary data were sourced from audited financial statements, and panel regression analysis was employed for data estimation. The findings reveal that board size and firm size have a significant negative impact on cash holding. Conversely, board independence has a significant positive effect on cash holding. However, board meetings show an insignificant relationship with cash holding, implying that the frequency of board meetings alone may not directly influence liquidity decisions. The study concludes that corporate governance mechanisms play a critical role in cash management strategies among Nigerian commercial banks. It recommends maintaining an optimal board size, strengthening board independence, and adopting efficient cash management strategies to ensure financial stability.

Keywords: Board Characteristics, Cash Holding, Board Size, Board Independence,