IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025issue-6p1432-1449.html
   My bibliography  Save this article

Board Characteristics and Firm Value: Evidence from Listed Firms in Nigeria

Author

Listed:
  • Akinwumi, Akinlolu Adekunle

    (Student, Department of Accounting, Nile University of Nigeria, Nigeria.)

  • Onmonya, Lucky Otsoge

    (Lecturer, Department of Accounting, Nile University of Nigeria, Nigeria.)

Abstract

The study investigated the impact of board characteristics (including board size, board independence and gender diversity) on firm value indicators (Market Capitalization and Earnings Per Share) among companies listed on the NGX 30 index. The study used audit quality as control variable. The study used secondary data covering 2014 to 2023. Robust Pooled Regression Analysis was adopted. The study found that board independence has significant positive influence on firm value under the two models. The study showed mixed findings for the impact of board size on firm value on both models. The study found that board size has significant positive impact on firm value under model 1 (MCAP) but insignificant positive impact on model 2 (EPS). The findings of this study on gender diversity are mixed on both models used. The results show gender diversity has significant negative effect on firm value under model 1 but show it has significant positive impact on firm value under model 2. The findings of this study on audit quality are mixed on both models. Audit quality has significant positive effect on firm value under model 1 but shows significant negative impact under model 2. The study recommended that the ratio of independent directors to the entire board size should be enhanced by shareholders at its annual general meetings and policy makers should mandate higher number of independent directors in the composition of the board.

Suggested Citation

  • Akinwumi, Akinlolu Adekunle & Onmonya, Lucky Otsoge, 2025. "Board Characteristics and Firm Value: Evidence from Listed Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 1432-1449, June.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:1432-1449
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-6/1432-1449.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/board-characteristics-and-firm-value-evidence-from-listed-firms-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ahmadu U. Sanda & Aminu S. Mikailu & Tukur Garba, 2010. "Corporate governance mechanisms and firms' financial performance in Nigeria," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 2(1), pages 22-39.
    2. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    3. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    4. Donald D. Bergh & Brian L. Connelly & David J. Ketchen Jr & Lu M. Shannon, 2014. "Signalling Theory and Equilibrium in Strategic Management Research: An Assessment and a Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 51(8), pages 1334-1360, December.
    5. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    6. Malcolm Baker & Jeffrey Wurgler, 2002. "Market Timing and Capital Structure," Journal of Finance, American Finance Association, vol. 57(1), pages 1-32, February.
    7. Paul Gompers & Joy Ishii & Andrew Metrick, 2003. "Corporate Governance and Equity Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 107-156.
    8. Bena, Jan & Ferreira, Miguel A & Matos, Pedro & Pires, Pedro, 2017. "Are foreign investors locusts? The long-term effects of foreign institutional ownership," Journal of Financial Economics, Elsevier, vol. 126(1), pages 122-146.
    9. Collins Ntim, 2015. "Board diversity and organizational valuation: unravelling the effects of ethnicity and gender," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(1), pages 167-195, February.
    10. Paul Guest, 2009. "The impact of board size on firm performance: evidence from the UK," The European Journal of Finance, Taylor & Francis Journals, vol. 15(4), pages 385-404.
    11. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    12. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2008. "Boards: Does one size fit all," Journal of Financial Economics, Elsevier, vol. 87(2), pages 329-356, February.
    13. Bhagat, Sanjai & Bolton, Brian, 2008. "Corporate governance and firm performance," Journal of Corporate Finance, Elsevier, vol. 14(3), pages 257-273, June.
    14. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
    15. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amitava Roy, 2014. "Corporate Governance and Firm Performance: An Exploratory Analysis of Indian Listed Companies," Jindal Journal of Business Research, , vol. 3(1-2), pages 93-120, June.
    2. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, December.
    3. Hussein Abedi Shamsabadi & Byung-Seong Min & Richard Chung, 2016. "Corporate governance and dividend strategy: lessons from Australia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(5), pages 583-610, October.
    4. Chenglong Zheng & Roy Kouwenberg, 2019. "A Bibliometric Review of Global Research on Corporate Governance and Board Attributes," Sustainability, MDPI, vol. 11(12), pages 1-25, June.
    5. Paolo Roffia & Virginia Simón-Moya & Javier Sendra García, 2022. "Board of director attributes: effects on financial performance in SMEs," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1141-1172, September.
    6. Trinh, Vu Quang & Cao, Ngan Duong & Vo, Xuan Vinh, 2023. "Driven mechanisms of board commitment: A modified corporate CANE model," European Management Journal, Elsevier, vol. 41(1), pages 21-33.
    7. Akshita Arora & Chandan Sharma, 2015. "Impact of Firm Performance on Board Characteristics: Empirical Evidence from India," IIM Kozhikode Society & Management Review, , vol. 4(1), pages 53-70, January.
    8. Omar Farooque & Wonlop Buachoom & Nam Hoang, 2019. "Interactive effects of executive compensation, firm performance and corporate governance: Evidence from an Asian market," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1111-1164, December.
    9. Sugato Chakravarty & Chiraphol N. Chiyachantana & Christine Jiang, 2011. "THE CHOICE OF TRADING VENUE AND RELATIVE PRICE IMPACT OF INSTITUTIONAL TRADING: ADRs VERSUS THE UNDERLYING SECURITIES IN THEIR LOCAL MARKETS," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 34(4), pages 537-567, December.
    10. Franco Ernesto Rubino & Paolo Tenuta & Domenico Rocco Cambrea, 2017. "Board characteristics effects on performance in family and non-family business: a multi-theoretical approach," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 623-658, September.
    11. Nisar Ahmad & Amjad Naveed & Amna Fazal, 2018. "An Empirical Analysis of Boardroom Diversity on Firm Performance," Review of Economics & Finance, Better Advances Press, Canada, vol. 13, pages 62-76, August.
    12. repec:csr:wpaper:1014 is not listed on IDEAS
    13. Monem, Reza M., 2013. "Determinants of board structure: Evidence from Australia," Journal of Contemporary Accounting and Economics, Elsevier, vol. 9(1), pages 33-49.
    14. Henrique Castro Martins & Cristiano Machado Costa, 2020. "Does control concentration affect board busyness? International evidence," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(3), pages 821-850, September.
    15. Grashuis, Jasper & Cook, Michael, 2016. "Governance and Performance in the U.S. Agri-Food Industry: A Comparative Study of Firms and Cooperatives," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235676, Agricultural and Applied Economics Association.
    16. Liu, Chunyan & Uchida, Konari & Yang, Yufeng, 2012. "Corporate governance and firm value during the global financial crisis: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 70-80.
    17. Bill Francis & Iftekhar Hasan & Michael Koetter & Qiang Wu, 2012. "Corporate Boards And Bank Loan Contracting," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 35(4), pages 521-552, December.
    18. Chauhan, Yogesh & Dey, Dipanjan Kumar & Jha, Rajneesh Ranjan, 2016. "Board structure, controlling ownership, and business groups: Evidence from India," Emerging Markets Review, Elsevier, vol. 27(C), pages 63-83.
    19. Arun Upadhyay, 2014. "Social Concentration on Boards, Corporate Information Environment and Cost of Capital," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 41(7-8), pages 974-1001, September.
    20. Saha Rupjyoti & Kabra Kailash Chandra, 2019. "Does corporate governance influence firm performance? Evidence from India," Economics and Business Review, Sciendo, vol. 5(4), pages 70-89, December.
    21. Mamdouh Abdulaziz Saleh Al-Faryan, 2021. "The effect of board composition and managerial pay on Saudi firm performance," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 693-758, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:1432-1449. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.