Effect of Board Meetings and Financial Expertise on Financial Performance of Listed Banks in Kenya and Tanzania.

Abstract

This paper examined the effect of board meetings and financial expertise on financial performance of listed banks in Kenya and Tanzania from 2017 to 2022. The study employed the agency and resource dependence theories as theoretical foundations. Fixed panel regression model was used to analyze a balanced sample of 12 listed banks from Nairobi Securities Exchange (NSE) in Kenya and Dar es Salaam Stock Exchange (DSE) in Tanzania from 2017 to 2022 (72 listed firm years). Board meeting frequency was measured by the number of board meetings conducted in a year; board financial expertise was measured by the proportion of board members with financial and accounting background. Financial performance metric used was Return on equity (ROE). The findings reveal that board meetings exert a positive and significant influence to financial performance of listed banks as measured by ROE. These findings support the contention that frequency of board meetings would improve the financial performance of listed banks as board members would have enough time to discuss pertinent issues that might affect the survival of the banks. This study has some visible limitations. First and foremost, the data used in this study were sourced from 12 banks listed at NSE and DSE. Thus, this will limit the generalization of this study finding. Future studies can examine the impact of board meeting and board financial expertise on financial performance of non-listed banks in Kenya and Tanzania using accounting financial metrics (ROA and ROE) and market based financial metric (Tobin Q)