Effect Of Board Diversity On Financial Performance Of Listed Firms In Nigeria

Most listed firms in Nigeria constitute a board with people from various backgrounds. This may be done to give friendly impression and ensure balanced decision making process. Also this may be a ground for unending debate /argument. However the extent this impact on the performance of firms has not been fully established. This study examined the effect of board diversity on financial performance of listed firms in Nigeria. Using Ex-post facto research design with content analysis approach to specific variables, the study employed multiple regression analysis in analyzing data collated from the financial statement selected firms in the Nigerian stock exchange between 2014 and 2018. Findings revealed that gender diversity has no significant effect on leverage ratio of the listed firms while educational diversity and nationality diversity both have no significant effect on leverage ratio of the listed firms in Nigeria. This will not only give credence to the contemporary propagation of gender equality but having more female members who are resourceful in risk evaluation will serve as a check to the possibility of bankruptcy when firms expose themselves to high leverage ratio. Also, the listed firms should admit board members that are resourceful as a result of educational diversity. This will help the board to have the required human resources to evaluate the best possible financing option vis a vis cost of capital and any agency issues that may arise from such investment decision. The board members with diverse nationality are resourceful and vast in international business culture and economic experiences. This will help the board members navigate the contemporary economic dynamisms as a result of business globalization which poses a threat to the survival of businesses on daily basis. The policy implication of this study is that in formulating policy regarding board composition, gender, nationality and expertise/education should be ignore. Thus it is recommended that listed firms Nigeria should consider highly the need to admit more female board members so as to balance up the ratio of gender diversity