Title: The Role of Independent Directors on Board of Directors' Performance: Evidence from Keystone Bank Limited, Abuja
Authors: Michael Ikupolati, Shehu, Mohammed, Dorathy Uduak Achumba
Volume: 9
Issue: 10
Pages: 14-26
Publication Date: 2025/10/28
Abstract:
This study examines how independent directors affect the functioning of the boards of directors of twenty-one (21) Keystone banks in Abuja between 2021 and 2024. The study's particular goals were to determine how the performance of the board of directors of Keystone banks in Abuja was affected by the tenure, compensation, number, interlocking, expertise, and demographics of independent directors. In order to analyze the data set, the study used descriptive statistics, a correlation matrix, and ordinary least square regression techniques. The study's conclusions showed that the performance of Keystone Bank board directors is positively and significantly correlated with the director's term, compensation, experience, and demographics. The performance of the board as determined by Return on Assets (ROA) was also found to be negatively and negligibly impacted by the number of independent directors and interlocking directorship. This finding implies that an improvement in the traits of these independent directors will have a major impact on the performance of the board of directors as a whole. An independent director with a longer term will have more information and experience about Keystone Bank's strategy, which will improve oversight and performance. Paying highly qualified independent directors will draw and keep them, which can lead to enhanced decision-making, ethical behavior, motivation, and a diversity of knowledge.