Authors:
Muhammad Usaini
Addresses:
Department of Accounting and Finance, Federal University Gusau, Gusau, Zamfara, Nigeria.
Abstract:
Insurance firms' financial stability and operational performance depend more on risk management. Corporate governance involves management, strategy, and risk management by the board of directors. Risk management in Nigerian listed insurance companies depends on board size, composition (independent directors), and financial expertise. Risk mitigation governance is essential for stakeholders and regulators in a sector with operational, market, and financial risks. The quantitative study examines how the structural and professional qualities of corporate boards affect the risk management of Nigerian insurers, using agency theory and resource dependence theory. Twelve NGX insurance providers' 2013–2022 annual reports included secondary data. A composite risk management index measured risk disclosure and formal governance to evaluate risk management. Firm-specific heterogeneity was addressed by adding control variables like company size and age to independent variables like board size, independence, and financial expertise. STATA computed descriptive statistics and panel regression models. The study found that larger boards enhance risk management by offering diversified expertise and broader monitoring. Objective supervision and reduced management opportunism are claimed to improve risk governance by independent directors. Financially literate boards can better understand complicated financial risks and adopt suitable measures, as evidenced by a positive and statistically significant effect.
Keywords: Board Independence; Financial Expertise; Risk Management; Corporate Governance; Nigerian Exchange Group (NGX); Panel Regression; Risk Governance; Resource Dependency Theory.
Received: 14/05/2024, Revised: 02/07/2024, Accepted: 08/09/2024, Published: 05/06/2025
DOI: 10.64091/ATIML.2025.000137
AVE Trends in Intelligent Management Letters, 2025 Vol. 1 No. 2 , Pages: 76-82