Board Structure and Performance of Quoted Firms in Nigeria
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Date
2016
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Abstract
This study examined the relationship between board structure and performance of quoted firms in Nigeria. It also examined the effects of the board size and analysed the effects of CEO duality on the performance of quoted firms. These were with the view to establishing the effects of board structure on the performance of firms in Nigeria.
The study used secondary data. The population of the study comprised of 200 quoted firms and 30 firms were purposively selected. The sample period covered years 2009 to 2013 and data were sourced from the annual reports and accounts of the selected firms. Data collected were analysed using descriptive statistics (median, minimum and maximum) and inferential statistics – the simple and multiple regression analysis of the ordinary least square method. The board structure variables were board size, board composition, CEO duality, board ownership structure and accounting expertise of board members while the firm performance was proxied by Return on Equity, Return on Assets and Tobin’s Q.
The study found that board structure was statistically related to Return on Assets with F-statistic value of 2.885894 and p-value of 0.016304. The board structure was also statistically related to Return on Equity showing F-statistic value of 3.907164 with p-value of 0.002373 and to Tobin’s Q with F-statistic value of 6.422144 and p-value of 0.000020. The board size was statistically insignificant to Return on Assets with t-statistic value of -1.325119 and p-value of 0.1872. The board size was also statistically insignificant to Return on Equity with t-statistic value of -0.083636 and p-value of 0.9335 and to Tobin’s Q with t-statistic value of -0.898709 and p-value of 0.3703. The CEO duality was also statistically insignificant to Return on Assets with t-statistic value of 0.659957 and p-value of 0.5103. It was also statistically insignificant to Return on Equity with t-statistic value of 0.992250 and p-value of 0.3227 and to Tobin’s Q with statistic value of 1.430551 and p-value of 0.1547. This therefore implied that board structure was significantly related to performance of quoted firms in Nigeria. The board size did not have significant effects on the performance of quoted firms in Nigeria. Also, the CEO duality did not have significant effects on the performance of firms.
The study concluded that board dominated by non-executive directors did not have effects on the performance of a firm.
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x,119p
Keywords
Firms, Board Structure, Performance, Data, Equity