RISK FINANCING STRATEGIES AND CORPORATE GOVERNANCE MECHANISMS AS DRIVERS OF FINANCIAL SUSTAINABILITY AND OPERATIONAL SELF-SUFFICIENCY IN AFRICAN BANKING INSTITUTIONS

Abstract

This research paper focused on the impact of the risk financing policy, corporate governance systems, project success on the financial sustainability and operational self-sufficiency of the banking sector in Nigeria. The panel data of our deposit money banks and econometric analysis demonstrates that board independence, gender diversity are material determinants of financial sustainability and ownership concentration is beneficial to operational efficiency but poses a threat to minority shareholders. The dimensions of board is a curvilinear variable whereby moderate increase in board size facilitates oversight, however, beyond that, oversight is hindered. These results are in line with the agency and stakeholder theories and emphasize the need to have a balanced governance framework to address risk and create sustainable value within new financial systems. This paper concludes that good governance is not just a compliance instrument, but a strategic instrument of financial strength, competitiveness and sustainable development in emerging financial systems and this has policy implications of improved regulatory regimes on board and structure, disclosure of ownership and gender balance.