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The Relationship Between Board Diversity and Corporate Financial Performance: Empirical Evidence from Five Selected Commercial Banks in Nigeria

Received: 2 July 2019     Accepted: 4 August 2019     Published: 15 August 2019
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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.

Published in International Journal of Finance and Banking Research (Volume 5, Issue 4)
DOI 10.11648/j.ijfbr.20190504.13
Page(s) 76-90
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Corporate Governance, Financial Performance, Board Diversity, Panel Data, Fixed Effects, Nigerian Banks

References
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Cite This Article
  • APA Style

    Sixtus Cyprian Onyekwere, Samuel Wesiah, Shukriyya Nuuman Danbatta. (2019). 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, 5(4), 76-90. https://doi.org/10.11648/j.ijfbr.20190504.13

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    ACS Style

    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. Int. J. Finance Bank. Res. 2019, 5(4), 76-90. doi: 10.11648/j.ijfbr.20190504.13

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    AMA Style

    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. Int J Finance Bank Res. 2019;5(4):76-90. doi: 10.11648/j.ijfbr.20190504.13

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  • @article{10.11648/j.ijfbr.20190504.13,
      author = {Sixtus Cyprian Onyekwere and Samuel Wesiah and Shukriyya Nuuman Danbatta},
      title = {The Relationship Between Board Diversity and Corporate Financial Performance: Empirical Evidence from Five Selected Commercial Banks in Nigeria},
      journal = {International Journal of Finance and Banking Research},
      volume = {5},
      number = {4},
      pages = {76-90},
      doi = {10.11648/j.ijfbr.20190504.13},
      url = {https://doi.org/10.11648/j.ijfbr.20190504.13},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20190504.13},
      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.},
     year = {2019}
    }
    

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  • TY  - JOUR
    T1  - The Relationship Between Board Diversity and Corporate Financial Performance: Empirical Evidence from Five Selected Commercial Banks in Nigeria
    AU  - Sixtus Cyprian Onyekwere
    AU  - Samuel Wesiah
    AU  - Shukriyya Nuuman Danbatta
    Y1  - 2019/08/15
    PY  - 2019
    N1  - https://doi.org/10.11648/j.ijfbr.20190504.13
    DO  - 10.11648/j.ijfbr.20190504.13
    T2  - International Journal of Finance and Banking Research
    JF  - International Journal of Finance and Banking Research
    JO  - International Journal of Finance and Banking Research
    SP  - 76
    EP  - 90
    PB  - Science Publishing Group
    SN  - 2472-2278
    UR  - https://doi.org/10.11648/j.ijfbr.20190504.13
    AB  - 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.
    VL  - 5
    IS  - 4
    ER  - 

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Author Information
  • Department of Economics, Aduvie Pre University College, Abuja, Nigeria

  • Department of Tax and Regulatory Services, PwC, Lagos, Nigeria

  • Department of Accounting and Finance, University of Portsmouth, Portsmouth, UK

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