Board Attributes and Stock Returns of Listed Consumer Goods Companies in Nigeria

Abstract

This study investigates how board attributes (BA) affect the stock returns (SR) of Nigerian quoted consumer goods companies (QCGC). Size, independence, and financial knowledge of the board were all employed as predictor variables. For the purpose of addressing the problem, this investigation chose descriptive and expost facto methodology as well as positivist view point. The twenty-three (23) QCGC of the Nigerian Stock Exchange (NES) as of 2020 made up the population. A sample size of sixteen (16) QCGC was obtained using the purposive sampling procedure. Secondary sources were employed to compile the study's data. The data were gathered from the yearly financial reports of the selected corporations for ten (10) years (2011-2020). With the use of STATA-13, the study used multiple regression as the analysis method. The study utilised the Hausman specification test to examine endogeneity because the data it used were panel data (i.e., crosssectional time series data). The Breusch-Pagan test for heteroscedasticity and the test for Multicollinearity utilizing the Variance Inflation Factor (VIF) were additional robustness tests used in this study to assess the model's suitability and the validity of the results. According to the overall regression result indicated by the R-squared, BAs can be utilised to forecast how SRs would behave in the QCGC. Accordingly, it was discovered that board independence and financial skill had a positive significant effect on SRs, whereas board size has no significant impact on SRs of QCGC in Nigeria. According to the study's findings, the board of directors of QCGCs should expand their capability for monitoring discretionary management conduct by adding at least three accounting and financial professionals to the board to advance the quality of earnings.