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Effect Of Board Characteristics on the Financial Performance of Manufacturing Firms in Nigeria

KUMA Abunde Benjamin, M T, Soomiyol, and, JM, Korna

Abstract

This study examined effect of board characteristics on the financial performance of manufacturing firms in Nigeria. The study was carried out using an ex- post research design the study seeks to find out the effect of board size, board independence, board ownership, and the interaction between board size and board independence with directors’ remuneration as control variable, on the financial performance of listed manufacturing firms in Nigeria. The data used were obtained from the annual reports of the manufacturing firms listed on the Nigeria Stock Exchange from 2016 to 2022. The data obtained for the study is analyzed using panel data analyses technique. The descriptive statistics, correlation analysis, and test of data normality, multicellularity and heteroscedasticity are also carried out in this study. Multiple regression analysis was employed to measure the relationships between dependent and the several independent variables. The result of the study shows that Board independence has significant effect on financial performance of listed manufacturing companies in Nigeria. It was concluded that greater board independence be initiated and implemented as this may affect policy making, monitoring and supervision of the operations of the firms by the entity’s management. It is recommended that Management of listed manufacturing firms in Nigeria should encourage greater independence of the board because of the fact the non-executive directors, who are seen to be independent of the company, have the potential to compel entrenched management to pursue profit maximizing strategies.

Keywords

board characteristicsfinancial performancemanufacturing firmsStock Exchange

References

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