Corporate Governance and Working Capital Management of Listed Manufacturing Firms in Nigeria

This study examined the effect of corporate governance, specifically board size, board independence and board meetings, on the working capital management of listed manufacturing firms in Nigeria. The study covered the period from 2008 to 2022 and employed an ex-post facto research design, with a population consisting of 46 listed manufacturing firms on the Nigerian Exchange. A sample of 20 firms was selected using a filtering technique. Multiple linear regression analysis was used. The findings revealed that larger board sizes are associated with more efficient working capital management, as indicated by a shorter cash conversion cycle. Board independence was found to have a negative but insignificant effect on working capital management efficiency. Also, more frequent board meetings were related to less efficient working capital management, resulting in a longer cash conversion cycle. The study concluded that larger board sizes are associated with more efficient working capital management. On the other hand, excessive board meetings might only lead to inefficiencies or distractions that hinder effective working capital management. The study further concluded that the effect of board independence on working capital management is trivial as the presence of the independent directors do not significantly affect working capital management of sampled firms. The study recommended that increasing board size may enhance a firm's ability to manage its working capital effectively. Furthermore, the study recommended that firms should also strategically plan board meetings to ensure they are productive and focused on key issues.

Working capital, corporate governance, cash conversion cycle

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