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Effect of Board Diversity on Earnings quality of Non-Financial Firms Listed at the Nairobi Securities Exchange

Author

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  • Sammy Thuo Kangea
  • Tabitha Nasieku
  • Willy Muturi

Abstract

The study's main objective was to examine the relationship between board diversity and earnings quality of non-financial firms listed on the Nairobi Securities Exchange (NSE) and how ownership concentration acted as a moderator. As of December 31, 2020, the NSE had 39 non-financial firms listed. The secondary data was collected over a 13-year period (2008-2020). The study used a quantitative research design and positivist research philosophy. The data were analyzed using panel regression. It was put through diagnostic and specification tests. The study found that board diversity had a significant impact on non-financial firms' earnings quality, both with and without ownership concentration as a moderator. The moderator model outperformed the one without (ownership concentration). The study concludes that board diversity has a significant impact on non-financial firms traded on the NSE. The findings suggest that non-financial companies listed on the NSE should carefully examine the criteria used to define board diversity and its characteristics. Thus, boards will be more accountable to shareholders, reducing earnings manipulation. Â

Suggested Citation

  • Sammy Thuo Kangea & Tabitha Nasieku & Willy Muturi, 2022. "Effect of Board Diversity on Earnings quality of Non-Financial Firms Listed at the Nairobi Securities Exchange," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 12(3), pages 1-4.
    • Handle: RePEc:spt:apfiba:v:12:y:2022:i:3:f:12_3_4
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    References listed on IDEAS

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