Corporate Board Heterogeneity and Firm Performance of Listed Manufacturing Firms in Nigeria

Abstract

This study investigated the impact of corporate board heterogeneity on the financial performance of listed firms in Nigeria. The study analyzed panel data on various types of board heterogeneity, such as board gender heterogeneity (BOGD), board foreign director heterogeneity (FDRP), board CEO gender heterogeneity (CEOG), and board ownership heterogeneity (CEON). The firm's leverage variable was also included as a control. Data was gathered from 42 companies listed on the Nigerian Exchange Group whose financial accounts were made public for ten years, from 2012 to 2021. The study used EVAA (Economic Value-Added Analysis) to measure firm performance. The collected data underwent various screening and diagnostic tests to meet the basic assumptions required for inferential statistical analysis. The data was analyzed using statistical methods such as descriptive and moderate multiple regression. The results revealed that board gender heterogeneity (BOGD), CEO gender heterogeneity, and ownership heterogeneity had no significant impact on the financial performance (EVAA) of listed companies in Nigeria. However, FDRP (foreign director heterogeneity on the board) significantly influenced financial performance (EVAA). The investigation found that although the gender heterogeneity of the board of directors and ownership heterogeneity do not significantly impact the firm's performance, management of firms may need to consider hiring and retaining foreign nationalities on the corporate board in Nigeria. This is because foreign directors can provide more varied perspectives, ideas, and expertise, which, in turn, increases the capacity of the firm to make more informed and effective decisions.