IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 10 NO. 8 2024
DOI: 10.56201/ijebm.v10.no8Sept.2024.pg113.136

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Board Mechanism and Firm Leverage of Consumer Goods Companies in Nigeria Ekwueme, Chinyere

Prince Chinedu Okeke PhD and Sunday, David

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Abstract

The study examined the effect of board mechanism on firm leverage of consumer goods firms in Nigeria. The independent variables of this study are board meetings, board independence, board gender diversity and managerial ownership while the dependent variable is firm leverage measured by debt to equity. The study adopted Ex-post facto research design. The population of this study consists of 16 listed consumer goods firms in Nigeria Exchange group as at 31st December, 2023. The study used the whole sixteen (16) companies as sample size. The study used secondary data, secondary data used were collected from annual financial reports of the sampled companies for twelve (12) years period spanning from 2012-2023. Panel least square model was developed to test the effect between dependent and independent variables. It was operated using EVIEWS 12. The results of the panel least square model revealed that, board meetings has a positive significant effect on the firm leverage of sampled firms in the Nigerian exchange group (P<.5), board independence has a positive significant effect on the firm leverage of sampled firms in the Nigerian exchange group (P<.5), board gender diversity has a positive significant effect on firm leverage of sampled firms in the Nigerian exchange group. (P<5) and managerial ownership has also positive significant effect on the firm leverage of sampled firms in the Nigerian exchange group. (P<.5). The study concludes that corporate mechanism has significant effect on leverage of consumer goods firms in Nigeria. The study recommended that, consumer goods firm board is encouraged to increase the frequency of board meetings as it has positive effect on firm leverage and also seen as a determinant of the firm’s leverage, firm should engage more independent directors on their board as they have impact on the leverage of the firm, firms are encouraged to have more gender diversity and the management of firms are also

keywords:

Board Mechanism, Board Independence, Board Meetings, Board Gender Diversity

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