Effect of Board Characteristics on the Value Relevance of Segment Earnings

The paper investigated the effect of board characteristics on the value relevance of segment earnings of Nigerian listed deposit money banks. The characteristics examined were board size, board independence and frequency of board meetings. The study adopted ex post facto research design and derived the data from the annual reports of the listed deposit money banks for the period 2012 to 2016. It formulated and tested nine hypotheses using ordinary least square method of multiple regressions. The results of the test of hypothesis revealed that board size enhanced the value relevance of Segment 1 earnings. It also showed that board independence improved the value relevance of Segment 1 earnings and Segment 2 earnings. The result further showed that board size did not strengthen the value relevance of Segment 2 earnings and Segment 3 earnings. Similarly frequency of board meetings did not improve the value relevance of Segment 1 earnings, Segment 2 earnings and Segment 3 earnings. Board independence did not enhance the value relevance of Segment 3 earnings. This result that board characteristics did not enhance the value relevance could be because the directors are not truly independent in mind and appearance. It is recommended that shareholders conduct due diligence on prospective board members.