Board Diversity and Dividend Policy of Listed Health Care Companies in Nigeria: The Moderating Effect of Financial Performance

Abstract

This paper examines the moderating effect of financial performance on the relationship between board dynamism and dividend payout of listed healthcare companies in Nigeria. Data were collected from the annual reports and accounts of 10 healthcare companies listed on the Nigerian Exchange Group over a period of 2011 to 2021. Ex post facto research design was employed and secondary data was sourced through annual reports of listed health care companies. Descriptive statistics and inferential statistics were employed to analyse the data using panel regression technique. The results show that board gender has a significant negative effect on dividend payout prior to moderation. Results however, changed to a significant positive effect when moderated with financial performance. Specifically, gender diversity, board qualification and board nationality have significant positive effects on dividend payout. In addition, financial performance significantly moderates the relationship between gender diversity and dividend payout. Impliedly, health care companies with more female directors perform better and tend to pay more dividends, Based on the findings of the study, there should be a policy decision of Nigerian healthcare firms that will give female directors a quota on the board of directors to be composed of women directors who have more corporate experience. The regulators should also encourage boards of Nigerian healthcare firms to consist of a more diverse board to positively foster performance, thus improving dividend payout. Managers of the Nigerian healthcare firms should ensure that more foreign directors are appointed to serve on their board to achieve a more favorable dividend policy. This can be achieved through direct foreign investment in the Nigerian healthcare companies.