BOARD COMMITTEES’ INDEPENDENCE AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

This study examined the effect of board committees’ independence on the financial performance of consumer goods companies in Nigeria. Specifically, the study investigated the effects   of audit committee’s independence, risk management committee’s independence and remuneration committee’s independence on financial performance measured by return on assets (ROA), while earnings per share (EPS) and returns on equity (ROE) where included as control variables.  An ex-post facto research design was adopted using secondary data extracted from the annual reports and financial statements of eleven (11) consumer goods companies listed on the Nigerian Exchange Group (NXG)  over the period 2015-2025. The Sample was selected purposively based on the availability and completeness of relevant data The study employed Prais–Winsten Regression with Panel-Corrected Standard Errors (PCSE) for data analysis. The findings revealed that audit committee independence has a positive and statistically significant effect on financial performance, while the independence of the risk management committee has a negative and statistically insignificant effect on financial performance. Similarly, remuneration committee independence was found to have a negative and marginally insignificant effect on financial performance. The study concluded that audit committee independence enhances financial performance through effective monitoring and accountability, whereas risk management committee independence and remuneration committee independence do not significantly improve profitability among consumer goods firms in Nigeria. The study recommended that firms should strengthen the operational effectiveness of audit committees, improve the technical competence of risk management committee members, and establish performance-based remuneration systems that align executive compensation with organizational goals and shareholders’ interests.