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Does Corporate Leadership Matter? Evidence from Nigeria

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  • Olatundun Janet Adelegan

    (University of Ibadan Nigeria)

Abstract

This study examines the impact of top management changes on stock returns in Nigeria from 1997 to 2005. The study also reflects on the impact of board composition and politics on shareholders’ wealth. The test of shareholder wealth effects around the time of top management changes is structured as an event study. Data were obtained principally from the Lagos and Ibadan branches of the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC).The study concludes that change in top management, including the composition of the board of directors, matters because announcements of board changes contribute to shareholder wealth, while corporate leaders affect the performance of the organization. In Nigeria, the announcement of the appointment of politically connected top managers produces positive information content and positive investor reaction, while the announcement of top management changes without political connections results in negative shareholder wealth. The findings are consistent with hypothesized benefits from internal mechanisms of corporate control in management change.

Suggested Citation

  • Olatundun Janet Adelegan, 2009. "Does Corporate Leadership Matter? Evidence from Nigeria," Working Papers 189, African Economic Research Consortium, Research Department.
    • Handle: RePEc:aer:wpaper:189
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    File URL: ftp://41.215.20.26/RePEc/aer/wpaper/RP189.pdf
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    Cited by:

    1. Yinka M. Salaudeen & Jide Ibikunle & Emmanuel Ib Chima, 2015. "Unethical Accounting Practice and Financial Reporting Quality: Evidence from Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 143-150, April.

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