Abstract
This study examines the relationship between board composition, ownership structure, and earnings management among 13 listed deposit money banks (DMBs) in Nigeria over the period 2013-2023. Employing a robust methodological framework, including Descriptive Statistics, Panel Correlation, Panel Multicollinearity, Panel Unit Root Test, Panel Cointegration Test, Panel Hausman Test, and the Panel Random Effects Model (REM), the research is grounded in Agency Theory and Stakeholder Theory to analyze the dynamics between corporate governance mechanisms and earnings management. The key findings reveal a significant negative relationship between institutional ownership and earnings management, indicating that higher institutional ownership reduces the likelihood of earnings manipulation. Similarly, ownership concentration is associated with reduced earnings management, suggesting that large shareholders effectively monitor management activities. Conversely, the study uncovers a positive relationship between board ownership, CEO ownership, and earnings management, indicating potential conflicts of interest where board members and CEOs may prioritize personal financial gains over shareholder interests, leading to increased earnings manipulation. Furthermore, while board independence is shown to reduce earnings management, larger board size and greater board financial expertise are surprisingly linked to higher levels of earnings manipulation, challenging conventional governance assumptions. The analysis of audit committee characteristics reveals that neither size nor independence alone significantly reduces earnings management, emphasizing the importance of member expertise and quality. The research contributes to the understanding of corporate governance by providing empirical evidence from the Nigerian banking sector, highlighting the critical roles of institutional investors and large shareholders in enhancing financial transparency and accountability. It also calls for a reevaluation of governance practices related to executive and board ownership and provides insights into the complexities of board composition. The findings have practical implications for policymakers, regulators, and financial institutions, advocating for enhanced governance standards and effective regulatory frameworks to mitigate earnings manipulation risks. However, the study acknowledges its limitations, including the focus on a single sector and reliance on quantitative data, which may limit the generalizability of the results. The research opens avenues for further exploration of the interaction between governance mechanisms and the impact of external factors on earnings management, particularly within emerging markets like Nigeria.