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Corporate Board Diversity and Financial Performance of Insurance Companies in Nigeria: An Application of Panel Data Approach

Author

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  • Tukur Garba
  • Bilkisu Aliyu Abubakar

Abstract

The major objective of this study is to investigate the relationship between board diversity and financial performance of insurance companies in Nigeria, with specific reference to how gender diversity, ethnic diversity, board size, board composition and foreign directorship affect financial performance of insurance companies listed on the Nigerian Stock Exchange. This study selects 12 listed insurance companies using non-probability sampling method in the form of availability sampling technique for a period of 6 years i.e. 2004 to 2009. Using ROA, ROE and TOBIN’s Q as measures of firm performance and applying Feasible Generalised Least Squares (FGLS) and random effects estimators, the findings of this study reveal that gender diversity and foreign directors have a positive influence on insurance companies’ performance. But the findings indicate a negative and significant relationship between board composition and performance of insurance companies in Nigeria. These findings have the implications that an increase in the number of female directors and foreign directors on the boards of insurance companies in Nigeria will enhance their performance but an increase in the ratio of outside directors on the board will reduce the performance.

Suggested Citation

  • Tukur Garba & Bilkisu Aliyu Abubakar, 2014. "Corporate Board Diversity and Financial Performance of Insurance Companies in Nigeria: An Application of Panel Data Approach," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(2), pages 257-277.
    • Handle: RePEc:asi:aeafrj:v:4:y:2014:i:2:p:257-277:id:1157
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    Citations

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    Cited by:

    1. Benjamin Ighodalo EHIKIOYA & Alexander Ehimare, OMANKHANLEN & Cordelia Onyinyechi, OMODERO & Ada MAC-OZIGBO, 2021. "Investigating the Impact of Managerial Entrenchment on Corporate Financial Structure: Evidence from Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(7), pages 563-574, July.
    2. Ali Shariff Kabara & Saleh F. A. Khatib & Ayman Hassan Bazhair & Hamid Ghazi H Sulimany, 2022. "The Effect of the Board’s Educational and Gender Diversity on the Firms’ Performance: Evidence from Non-Financial Firms in Developing Country," Sustainability, MDPI, vol. 14(17), pages 1-15, September.
    3. Ouedraogo Alidou, 2018. "Determinants of under-representation of women on Boards of Directors: an exploratory study of African public and private firms," Economics and Business Review, Sciendo, vol. 4(2), pages 98-113, June.
    4. Bello, Lawal, 2024. "Women Directors: An Empirical Test of Critical Mass Hypothesis," International Business Research, Canadian Center of Science and Education, vol. 17(2), pages 1-46, April.
    5. María Consuelo Pucheta-Martínez & Inmaculada Bel-Oms & Gustau Olcina-Sempere, 2018. "Female Institutional Directors on Boards and Firm Value," Journal of Business Ethics, Springer, vol. 152(2), pages 343-363, October.
    6. Luisa Anderloni & Ornella Moro & Alessandra Tanda, 2019. "Governance e performance nelle imprese di assicurazioni: un’analisi bibliometrica ed una meta analisi," DEM Working Papers Series 177, University of Pavia, Department of Economics and Management.
    7. Stefan Milojević & Marko Milašinović & Aleksandra Mitrović & Jasmina Ognjanović & Jelena Raičević & Nebojša Zdravković & Snežana Knežević & Malči Grivec, 2023. "Board Gender Diversity and Banks Profitability for Business Viability: Evidence from Serbia," Sustainability, MDPI, vol. 15(13), pages 1-16, July.
    8. Otuya Sunday & Ofeimun Godwin, 2017. "Effects of Board Globalizing on Financial Performance of Banks in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(4), pages 1-10, October.
    9. Jan Luca Pletzer & Romina Nikolova & Karina Karolina Kedzior & Sven Constantin Voelpel, 2015. "Does Gender Matter? Female Representation on Corporate Boards and Firm Financial Performance - A Meta-Analysis," PLOS ONE, Public Library of Science, vol. 10(6), pages 1-20, June.
    10. Abubakar Biu Aliyu & Onipe Adabenege Yahaya & Nma Ahmed Mohammed, 2021. "Board features and financial performance of Nigerian banks," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(1), pages 11-19, January.
    11. Nebyu Adamu Abebe & Navkiranjit Kaur Dhaliwal, 2024. "An empirical investigation of corporate governance attributes and firm performance: evidence from the ethiopian insurance industry," SN Business & Economics, Springer, vol. 4(10), pages 1-25, October.

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