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Vol. 14 No. 2 (2024): ESUT Journal of Accountancy (EJA)

Internal Board Mechanism on Financial Performance of Conglomerates in Nigeria

Submitted
August 25, 2024
Published
2024-08-25

Abstract

Research Objective: The study examined the effect of internal board mechanisms, specifically board size, CEO duality, and board gender diversity, on the firm performance of conglomerates listed on the Nigeria Exchange Group (NEX).
Methodology: An ex-post facto research design was employed, covering the period from 2011 to 2020. Secondary data were extracted from the audited annual reports and accounts of the sampled firms, and panel least square multiple regression analysis was conducted using fixed effects panel regression.
Findings: The results revealed that both board size and CEO duality had an insignificant positive effect on return on assets, suggesting that these factors do not significantly influence the financial performance of conglomerates. However, increased board gender diversity was found to have a detrimental impact on financial performance.
Conclusion: The findings indicate that while board size and CEO duality do not significantly affect financial performance, a diverse board in terms of gender may negatively influence conglomerate firms' return on assets.
Recommendations: The study recommends that conglomerates should not solely focus on altering board size or implementing CEO duality but should instead prioritise enhancing corporate governance practices, strategic decision-making, and resource utilisation. Additionally, when considering CEO duality, conglomerates should carefully assess its potential benefits and drawbacks in alignment with their strategic objectives and governance structure.

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