Does risk management committee matter in the market performance of listed manufacturing firms? evidence from a developing country

The board of director's Risk Management Committee (RMC) is a subcommittee with oversight of firm’s risk. This committee is also tasked with creating guidelines for the firm achieve its goals. The study aims to investigate the impact of RMC attributes on the market risk management that will help performance of Nigeria's listed manufacturing firms. Ex-post facto correlational design was adopted in the study. The population consists of all sixty-four (64) manufacturing firms from six (6) different industries that are listed on the Nigerian exchange market. The information was gathered from the firm’s annual financial reports, which covered an eight (8)-year period (2013–2020). The Panel Corrected Standard Errors (PCSEs) regression was adopted to test the hypotheses. The result showed that Risk Management Committee (RMC) size, independence, gender diversity and overlapped directors have a negative significant impact on market performance. Furthermore, RMC expertise has a positive significant impact on market performance while RMC diligence has a positive insignificant impact on firm value. The study incorporated the overlap director on the risk committee into the expanded model. This is the requirement of the code of corporate governance in Nigeria for listed firms. This has not received the attention of prior studies. The study provides insight to the Financial Reporting Council of Nigeria, stakeholders and corporate managers on the impact of having RMC with qualitative attributes on the growth and survival of firms. In addition, the study suggests that regulators should ensure that listed firms compose a separate risk committee with qualitative attributes with a significant number of members having accounting and finance knowledge.