CORPORATE BOARD DIVERSITY AND FIRM PROFITABILITY: THE NIGERIAN
PRIVATE SECTOR PERSPECTIVE

INYANG, ETHEL OHANYA & ENYA, FRANCIS EJEJE
Department of Accounting, Faculty of Management Science, University of Calabar
EMAIL: ethelinyang@gmail.com&enyafrancisejeje4pdd@gmail.com
Phone:08066013058, 08066935105

Abstract
Over the last two decades, the question of board diversity as drivers of effective corporate governance has considerably been on the increase, as a diverse board is believed to carry out its control function more effectively. We examine the relationship between corporate board diversity and firm performance using both market and accounting measures of performance in the Nigerian private sector. We make a case for Nigeria considering that research on the area of board diversity is still at its infancy. Specifically, we consider gender diversity, foreign directorship as well as skill and expertise of directors as measures of diversity and the effect on return on asset (ROA).Ordinary least square regression technique was adopted to analyzes data collected from firms listed on the consumer goods segment of the Nigerian stock exchange (NSE) between 2015-2018. Data were obtained from published financial statements of the sampled companies and the Nigerian stock exchange fact book. For the purpose of uniformity, we excluded firms with incomplete records for the period under consideration. The results of this study show a positive relationship between gender diversity, and foreign directorship and firm performance. Our study also reveals that the percentage of female directors and foreign directors on the boards of companies listed on the Nigerian stock exchange for the period under review is quite low compared to what is obtainable in other climes. The most recent codes of corporate governance in Nigeria are silent on board composition and diversity as it gives organizations the powers to appoint directors with the requisite skills and knowledge to chart the affairs of the organization to achieve its set objectives. Considering the positive though and significant effect on performance of corporate diversity, we recommend that subsequent codes of corporate governance are more explicit as regards board diversity by specify a minimum representation
of women on boards, foreign directors
Keyword(s): Corporate governance, board diversity, Institutional theory, Nigeria

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