The Relationship Between Board Diversity and Corporate Financial Performance: Empirical Evidence from Five Selected Commercial Banks in Nigeria
International Journal of Finance and Banking Research
Volume 5, Issue 4, August 2019, Pages: 76-90
Received: Jul. 2, 2019; Accepted: Aug. 4, 2019; Published: Aug. 15, 2019
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Authors
Sixtus Cyprian Onyekwere, Department of Economics, Aduvie Pre University College, Abuja, Nigeria
Samuel Wesiah, Department of Tax and Regulatory Services, PwC, Lagos, Nigeria
Shukriyya Nuuman Danbatta, Department of Accounting and Finance, University of Portsmouth, Portsmouth, UK
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Abstract
The purpose of this research was to investigate the nature of the relationship between board diversity and financial performance of deposit money Banks quoted on the Nigerian stock exchange. Based on extensive review of the literature, three board diversity variables were identified namely gender (measured by the proportion of women in the boardroom), non-executive directors (measured by the proportion of non-executive directors that make up the boardroom) and board size. Financial performance was measured using Return on Assets (ROA) and Return on Equity (ROE). The Fixed effects Panel data regression model was used to test the nature of relationship between the board diversity variables and the financial performance variables, using secondary data from the Banks annual financial statements covering the period from 2006-2017. The result of the analysis showed that gender diversity has a statistically significant positive impact on banks financial performance. On the other hand, the study also indicated that non-executive directors and board size do not have a significant impact on banks performance. Based on the findings from this study, it was therefore recommended that quoted deposit money banks in Nigeria should raise female proportions in their boardroom so as to improve financial performance.
Keywords
Corporate Governance, Financial Performance, Board Diversity, Panel Data, Fixed Effects, Nigerian Banks
To cite this article
Sixtus Cyprian Onyekwere, Samuel Wesiah, Shukriyya Nuuman Danbatta, The Relationship Between Board Diversity and Corporate Financial Performance: Empirical Evidence from Five Selected Commercial Banks in Nigeria, International Journal of Finance and Banking Research. Vol. 5, No. 4, 2019, pp. 76-90. doi: 10.11648/j.ijfbr.20190504.13
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Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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