Board Heterogeneity and Firm Performance of Listed Non-Financial Companies in Nigeria

Abstract

In Nigeria, existing studies on corporate governance concentrate heavily on single dimensions (often gender or board size) and frequently focus on financial firms. There is a paucity of comprehensive, multi-dimensional analyses of board heterogeneity’s effects on firm performance specifically for listed non-financial firms in Nigeria using robust panel methods that address endogeneity and industry heterogeneity. This study examined the effect of board heterogeneity on the performance of 36 listed non-financial firms in Nigeria over a nine-year period (2014–2022), using secondary data and a panel least squares regression model. Diagnostic tests confirmed model robustness, with the random effects model selected based on the Hausman test. Results show that board ethnicity and educational heterogeneity have a significant positive effect on firm performance, while board gender heterogeneity has a significant negative effect. Board nationality showed a positive but insignificant relationship. The research investigates the effect of board heterogeneity on the performance of 36 listed non-financial firms in Nigeria, using Tobin’s Q as a measure of firm performance. Exogenous variables include nationality, ethnicity, gender, and educational heterogeneity, with firm size and age as controls. The study recommends policy interventions to mandate minimum representation of minority ethnic groups on corporate boards to improve performance outcomes.