Board Structure and Financial Performance of Listed Firms in Nigeria: Moderating Effect of Board Remuneration
Abstract
This study examined relationship between board structure proxied by board size and board independence and corporate financial performance (earnings per share and return on assets) of listed manufacturing firms in Nigeria. It also explored the moderating effect of board remunerations on the board structure- financial performance relationship. The study adopted ex post facto and descriptive research design. It employed convenience sampling technique to determine the sample size of nine manufacturing firms in the consumer goods sector on the Nigerian Stock Exchange for the period 2010 – 2019. It collected data from the annual reports of the sampled firms and analyzed them using Fixed Effect Model and Random Effect Model of Panel Least Square Regressions. Findings/conclusion. It was found that that: (1) board size has a positive but insignificant relationship with earnings per share; (2) board size exhibited a positive and significant relationship with return on assets. (3) Board independence has a significant negative relationship with both earnings per share and return on asset. (4) Board remuneration has insignificant moderating effect on the relationship between board size and earnings per share as well as between board independence and earnings per share. (5) board remuneration has a significant adverse moderating effect on the positive board size-earnings per share relationship. And (6) Board remuneration has a significant positive effect on the board independence-return on asset relationship. The study concluded that board structure has significant impact on financial performance and recommended that consumer goods manufacturing firms should embrace larger board size, elect more non-executive directors who are truly independent, and grant more board remunerations that reflect performance.
Keywords
- Board Structure
- Corporate financial performance
- Board remuneration
- Consumer goods manufacturing firms
How to cite
Davies, S. D., Okoro, C. U., & Uduakabasi, P. (2022). Board Structure and Financial Performance of Listed Firms in Nigeria: Moderating Effect of Board Remuneration. KPA Journal of Accountancy, Finance and Business, 2(1), 26–50.