Abstract
With the rise of corporate failures and the conflict of interest arising from shareholders and the management, there have been growing concerns in corporate governance (CG). It is there is ponsibility of the board of director in CG is to oversee the management as well as the firm performance and to make the management accountable to shareholders. Hence this research examines the connection between firms’ performance and board features using board size, board independence in addition to board age as a proxy for board characteristics and turnover as a proxy for firm performance. A sample size of 16 consumer goods firms out of a population of 20 consumer goods firms listed in the NSE from 2016 to 2019 was used using a judgmental sampling technique. Secondary data employed was taken out from the sampled firms’ annual reports. Hausman test analysis was used to select the appropriate regression model, which is the fixed effect regression model that was utilized to analyse the connection between firms’ performance in addition to board characteristics. It is found that firm performance and board independence of the consumer services goods companies in Nigeria are significantly related.The results also confirmed that firm performance and board size of the consumer services goods companies in Nigeria are significantly related. The result indicates firm performance and board education of the consumer services goods companies in Nigeria are not significantly related. Consequently, overall lthe study concluded that firms’ performance and board characteristics are related. Also, board characteristics increase board performance which will lead to increase in firms’ performances, there by maximizing profit and ensuring efficiency. The study concluded that a company with good board characteristics would help to ensure the maximization of both the shareholders and stakeholders wealth. Hence a proper board characteristic helps to solve the problem of both agency theory and stakeholders’ theory.
Highlights
Board characteristics refer to features that can be used to measure the effectiveness and efficiency of corporate boards that are tasked with the overall management of the firm
Other firms’ performance measures mentioned are somehow derived from turnover, but there is a dearth of literature that used turnover and this study gives to this body of knowledge via employing consumer goods firms listed in the NSE to examine if firms’ performance is related to the board characteristics using turnover as a proxy of firm performance
This study concluded that board size as well as board independence have a vital connection with performance proxied by turnover
Summary
Board characteristics refer to features that can be used to measure the effectiveness and efficiency of corporate boards that are tasked with the overall management of the firm. It means to the paramount understanding of the researchers, studies that used consumer goods firms listed in the NSE in this subject are scared This is one gap in the literature this study seeks to cover. The connection amid firms’ performance as well as the board characteristics is yet to be well- known due to the mixed results of extant literature (Bathula, 2008; Ghabayen, 2012). It is for these reasons that the connection amid the performances of firms in addition to the board characteristics continues to be subject to continuous research and is always drawing huge attention from researchers. The features of the board of directors that were examined in addition to this consist of board size, board education and board independence
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