Effect of Board Characteristics on Financial Performance of Listed Consumer Goods Firms in Nigeria

Abstract

This study examines the effect of board characteristics on financial performance of listed consumer goods firms in Nigeria for the period of ten (10) years covering 2015 to 2024. An ex-post facto research design was adopted for the study. The population of this study consisted of 18 out of 19 consumer goods firms listed on the Nigerian Exchange Group (NGX) as of December 31st, 2024. The data used were secondary data extracted from the annual reports and accounts of listed consumer goods firms that are listed on the Nigerian Exchange Group within the period of the study. The study used economic value added to measure financial performance, while board size, board independence, board gender diversity, board financial expertise were used as proxies for board characteristics. The study used panel multiple regression and the results revealed that board independence, board gender diversity, and board financial expertise have a positive and significant effect on financial performance of listed consumer goods firms in Nigeria, while board size shows no significant effect on financial performance. The study concluded that board independence, board gender diversity, and board financial expertise enhance the financial performance of listed consumer goods firms in Nigeria. Board size does not influence the financial performance of listed consumer goods firms in Nigeria. Therefore, the study recommended that consumer goods firms should prioritize enhancing board independence, gender diversity, and financial expertise while maintaining an optimal board size to improve financial performance.