Corporate Board Attributes and Financial Performance of Listed Building Materials Companies in Nigeria
- July 14, 2018
- Posted by: RSIS
- Category: Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue VI, June 2018 | ISSN 2454-6186
SABO Usman
Abstract: – The study examines the impact of corporate board attributes and financial performance of listed building materials companies in Nigeria. The population of the study is made up of 12 listed building materials companies in Nigeria out of which 9 companies are selected to form the sample. The multivariate regression is used in analyzing the data. The findings of the study reveal that board size and board composition have negative and insignificant impact on financial performance. The study recommends that the number of directors in the board of these companies should not be more than twelve (12). It is also, recommended that the listed building materials companies in Nigeria should endeavor to increase the number of executive directors in the boards. These recommendations could be implemented by issuing an improved code of corporate governance by the central bank of Nigeria and Nigeria security and exchange commission.
Keywords: Board Attributes, Financial Performance, Building Materials, Central Bank of Nigeria, Nigeria Security and Exchange Commission.
I. INTRODUCTION
The corporate board attributes are important features of the board. Their nature and composition play significant roles in determining the efficiency and effectiveness of the board of directors. As an overseer, the board of directors is expected to make thorough scrutiny of company’s strategies, policies and plans before approval. This function lies heavily on the independent directors because the non executive directors are appointed by the shareholders and are responsible to them.
Shareholders and other stakeholders need to know the size of the board which plays an important role in the performance of a firm. The size of the board shows the number of both executive and non executive members that constitute the board of directors. The board composition is the number of non executive directors when expressed as a proportion to total board membership. To buttress this argument, Sanda, Garba and Mikailu (2011) stress that a board of directors comprising of reasonable proportion of executive and non executive directors are more likely to be independent of management than one dominated by executive directors, and therefore more likely to protect the interests of other stakeholders.
