Board Gender Diversity, Board Ethnic Diversity and Firm Value of Listed Financial Firms in Nigeria

Abstract

This study investigates the effect of board gender diversity, board ethnic diversity, and firm value on the listed financial service companies in Nigeria. Firm value, measured by Tobin's q and computed as the ratio of the firm's market value of equity to its book value of total assets, is the study's explained variable, while board gender diversity and board ethnic diversity are the study's explanatory variables. The study’s population comprises fifty-one (51) listed financial service firms on the Nigerian Stock Exchange as of December 31, 2020. Thirty-five (35) of these firms made up the sample size for a period of nine years (2012–2020). Data was acquired from the sampled companies' annual reports and analyzed using the feasible generalized least squares regression (FGLS) approach. According to the study, board gender diversity and board ethnic diversity had a significant positive impact on the firm value of listed financial services firms in Nigeria. According to the findings, the boards of directors of listed financial service organizations in Nigeria should ensure that females are considered for directorship seats on the boards in order to increase their value, as suggested by the resource dependency theory. In addition, the boards of directors of listed financial services firms in Nigeria should consist of a mix of both northerners and southerners to improve firm value.