BOARD ELEMENTS AS A PREDICTOR TO FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL FIRMS IN NIGERIA

Abstract

The wrong mentality of conflict of interest and having too much control or pocketing the shareholders and directors of a firm is causing serious problems in a firm and this has lead to business failures. The board impairment, gender diversity and conflicting laws arising from the nature or structure of ownership are other causes of failures in board characteristics. Thus, this study investigated the effect of board characteristics on financial performance of listed agricultural firms in Nigeria. Three proxy of board characteristics (Board size, Board Independence and Board Gender Diversity) and two measures of financial performance which include Return on Asset (ROA) and Return on Equity (ROE). These dimensions and measures were used to formulate six specific objectives, research questions and hypotheses. The study adopted an ex-post facto research design. The population of the study was 5 listed agricultural firms in Nigeria. Census sampling technique was used and considered all 5 listed agricultural firms. This study employed secondary sourced which covered a period of 10 years from 2012-2021. This study adopted descriptive statistics, Unit Root Test and Multiple Regression method of data analysis. The study result indicated board size has an insignificant effect with return on assets and return on equity; board independence has an insignificant effect with return on assets; board independence has a significant effect with return on equity, board gender diversity has significant effect with return on assets; board gender diversity has no significant effect with return on equity. Based on the findings, this study concludes that there is an insignificant effect of board characteristics on financial performance of listed agricultural firms in Nigeria. The study carefully recommends that listed firms in Nigeria should consider highly the need to admit more female board members to balance up the ratio of gender diversity. This will not only give credence to the contemporary propagation of gender equality but having more female members who are resourceful in risk evaluation will serve as a check to the possibility of bankruptcy and improve profitability.