Boardroom Dynamics and Firm Performance in Nigeria

A Multivariate Analysis

Abstract

This study investigated the relationships between boardroom dynamics and firm performance among non-financial Nigerian firms using an ex-post facto research design and data from a sample of 58 firms over a ten-year period (2013-2022). The coefficients are estimated using a Random Effects GLS Regression model and utilizing STATA 14 software. The regression analysis reveals that the overall model is significant at the 5% level (Wald chi-squared = 13.85, p-value = 0.0166), though individual predictors, except for board independence, do not significantly impact firm performance as measured by Tobin's Q. Specifically, board size, board meetings and board ownership show no significant effect on Tobin’s Q. However, board independence exhibited a significant negative impact on firm value, suggesting that higher board independence is associated with lower firm value. This study provides valuable insights for corporate governance practices in Nigerian firms, emphasizing the need for a redefined approach to boardroom dynamics, consider industry-specific guidelines to determine the optimal mix of independent and executive directors and encouraging it to develop meeting agendas that focus on strategic issues and long-term planning.