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Ownership Structure and Financial Performance of Listed Insurance Firms in Nigeria: Moderating Role of Independent Director

Author

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  • Hassan, Ismaila

    (Department of Accounting, Faculty of Management Sciences Kaduna State University, Kaduna, Nigeria)

  • Hassan Alhaji, Tanko

    (Department of Accounting, Faculty of Management Sciences Kaduna State University, Kaduna, Nigeria)

Abstract

The financial performance of listed insurance firms in Nigeria has been declined significantly. There are other factors that could lead to the poor financial performance but the researchers are specifically interested in examining the effect of independent director on the relationship between ownership structure and financial performance of listed insurance firms in Nigeria from 2013 to 2022 financial years. The ownership structure variables used in this study are institutional ownership and managerial ownership while the financial performance used is represented by return on assets (ROA), and the moderating variable is independent director. The sample of the study is all the twenty-three (23) listed insurance firms in Nigeria that make up the population of the study. The study uses secondary data and multiple regressions for the purpose of this study. The findings of the study reveal that institutional ownership and managerial ownership have negative and insignificant effects on financial performance of listed insurance firms in Nigeria. Independent director has a positive effect on the relationship between institutional ownership, managerial ownership and financial performance. The researchers therefore recommend that the Central Bank of Nigeria and National Insurance Commission should ensure that there is diversity of experience without compromising compatibility, integrity and independence.

Suggested Citation

  • Hassan, Ismaila & Hassan Alhaji, Tanko, 2023. "Ownership Structure and Financial Performance of Listed Insurance Firms in Nigeria: Moderating Role of Independent Director," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1833-1840, May.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1833-1840
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    References listed on IDEAS

    as
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    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Basiru Salisu KALLAMU, 2016. "Ownership Structure, independent directors and firm performance," Journal of Social and Administrative Sciences, KSP Journals, vol. 3(1), pages 17-30, March.
    5. Lioui, Abraham & Sharma, Zenu, 2012. "Environmental corporate social responsibility and financial performance: Disentangling direct and indirect effects," Ecological Economics, Elsevier, vol. 78(C), pages 100-111.
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