Still on board configuration: SEC recommendations and the efficiency of adhering firms in Nigeria

Abstract

This paper scrutinizes the effects of adherence to an encoded board configuration on firm efficiency in terms operational and financial performances using an integrated research framework that combines four distinct theories including agency, stewardship, stakeholders and resource dependency models. The research explores three main aspects of compliance outcomes; benefits accrued to conforming firms in terms of enhanced efficiency and market value, board level drivers as well as the external moderators of these benefits using a sample of 127 listed companies on the Nigerian Stock Exchange covering for the period of 1999-2010. Result show that board independence, directors' cognitive competencies as measured in terms of their educational qualifications and professional experiences are positively associated with efficient management of assets (ROA) and firm stock marketability (Tobin's q). I find no substantive empirical evidence to suggest that either the adoption of specific leadership structure or directors' ethnic representation affects firm performance. Moreover, country-level macroeconomic variables, especially the degree of economic openness play a significant role in determining the strength of association between board structure variables and firm performance measures.

An empirical evidence on the effect of women board representation on firm performance of companies listed in Iraq Stock Exchange

“…The paper adopted the accounting (ROA) and market value-based (Tobin's q) techniques for performance measures. Hence, ROA enables the study to draw the conclusions regarding the profitability of the firms while the Tobin's q, provides the basis for statistical inferences to investors (Lawal, 2016;Gentry & Shen, 2010). However, Firm Profitability ROA and Tobin's q were taken in line with the recommendations by prior studies (Giannarakis, 2014;Lawal, 2016;Saif-Alyousfi, Saha, & Md-Rus, 2017aBen-Amar, Chang, & McIlkenny, 2017).…”

“…Importantly, most CG studies from the Arab world have largely ignored to touch the role of female directors on the board as experience has shown that a large number of these studies only concentrated on other issues while little attention was paid to this important construct. The scholars in this regard have called for further investigations on the relationship between board gender diversity and firm performance (Kakabadse et al, 2015;Kılıç & Kuzey, 2016;Lawal, 2016;Nuhu & Ahmad, 2017a).…”

Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking

“…not too large or small). There is an increased presupposition among agency theorists that moderate board size engenders effective executive monitoring and makes it difficult if not costly for the CEOs to dominate (Lawal 2016;Huang and Wang 2015). Relying on the premise of group dynamics, proponents of small board size have contended that excessive membership heightens the risk of poor communication and the emergence of splinter groups which hampers board effectiveness (Pacini et al 2008;Goodstein et al 1994).…”

“…Racial diversity is defined as the proportion of foreign directors on the board and ethnicity is defined as the ratio of three major ethnic groups in Nigeria (i.e. Hausa, Yoruba and Igbo) represented on the board (Lawal 2016;Van der Walt et al 2006). Board quality is defined as the average years of directors' professional experience including board working knowledge (Van der Walt et al 2006;Anderson et al 2010).…”

“…Only recently have research paradigm shifted to the rudiments of corporate risk management which ordinarily ought to have been the central point of discuss going by the key premises of agency theory and existing corporate governance regulations (Li et al, 2013). The fall of colossus corporations like Enron and Lehman Brothers, resonated the far reaching implications that managerial recklessness without adequate board vigilance can exert on the overall firm survival as a going concern (Akbar et al, 2017;Lawal 2016). Investigations into some of these high profile corporate scandals have equally revealed excessive risk-taking as being instrumental in the events leading to the collapse of affected corporations (Jiraporn et al, 2015;Hutchinson et al, 2015).…”