THE  INFLUENCE OF BOARD DIVERSITY ON FINANCIAL PERFORMANCE AND MARKET VALUE: EVIDENCE FROM NGX COMPANIES

Omowunmi Jumoke  OGUNLEYE; Oluwabunmi Atinuke  ADEBUNMI; O. O.  ONAWOGA

Omowunmi Jumoke OGUNLEYE University of Lagos
Oluwabunmi Atinuke ADEBUNMI University of Lagos
O. O. ONAWOGA University of Lagos

Keywords: Board Diversity, Gender Diversity, Nationality Diversity, Committee Size, Financial Performance, Market Value, Consumer Goods Firms, Nigerian Exchange Group

Abstract

The study investigated how board diversity, regarding gender, nationality, and committee size, affects the financial performance and market value of the consumer goods firms listed in NGX. In this respect, the study has used descriptive statistics to indicate major differences in the nature of board diversity practices among the sampled firms. However, the inferential analysis using ROA and ROE indicated that neither gender nor nationality diversity had a significant effect on firm performance or its market value on a short term basis. These findings are in agreement with a number of other studies, but they disagree with other studies that have reported a positive link between board diversity and firm performance. The study concluded that while board diversity is disclosed in the financial statements in more companies than before, it exhibits limited short-term influence on financial performance and market value of these companies. Recommendations include promoting a more holistic approach towards board diversity, more support and monitoring from regulatory bodies, increasing awareness and training firms on board diversity, firm’s carrying out self-review of their board diversity practices and longitudinal studies to understand the long-term impact of board diversity on firm performance.”