Assessing the Effects of CEO Characteristics on the Financial Performance of Firms in Nigeria

This study investigated the relationship between CEO characteristics and the financial performance of listed firms in Nigeria (2005 –2022). The regression analyses employed in this study are pooled panel regression, random panel regression and fixed panel regression. Under the firm performance indicator – ROA, the Hausman-statistics p-value of 0.23 indicated that we accept the null hypothesis which says that random effect prevails. But the fixed effect result was adopted because it best explains the model as it considers the constant variables and solves the omitted variable bias problem. The result showed that CEO origin has a positive and significant impact on return on assets (2%). Whereas, CEO gender showed a negative and insignificant effect on return on assets (30%). CEO tenure impacts a negative and insignificant relationship with return on assets (62%). Furthermore, this result showed a positive and insignificant relationship between leverage and return on assets. While capital expenditure shows a negative and insignificant relationship with return on assets. The study recommends that, Firms should adopt internal recruitment in appointing CEO, as they tend to possess insider-knowledge and experience peculiar to the firm’s nature of work and relationship with the staff that an outsourced CEO may not have opportunity to immediately after his appoint and could be a major set-back in fulfilling the goal of the firm.