Do Financial Expertise, Nationality and Independence of Women on Corporate Board Mitigate Earnings Management of Listed Firms on NXG.

Abstract

This study evaluates the influence of financial expertise, nationality and independence of women on board of directors on earnings management of listed firms on NXG. Applying purposive sampling, a firm-year observation of 715 comprising 65 non-financial firms and secondary data from annual reports for 11years (2011-2021) were analysed using the holistic earnings management model. The outcome of the Generalised Least square (GLS) regression revealed that the measures of corporate board gender diversity attributes, CBGDAttr, (WOBFEXP, WOBNAT and WOBIND) jointly exert significant influence on earnings management (EARNMGT) of listed firms on NXG and upon this findings, it recommended that shareholder should strategize to increase gender diversity ratio to about 40% and that the nomination and governance subcommittee should take cognizance of the qualifications (financial expertise) and the independence of the female directors (INEDs) before appointment while considering appointing female foreigners with different nationalities having shares into the board to foster a creative environment where sharing of ideas and expertise across borders thrive; contributing to effective decision-making.