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Still on board configuration: SEC recommendations and the efficiency of adhering firms in Nigeria

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  • Bello Lawal

    (Glasgow Caledonian University, Scotland, United Kingdom)

Abstract

This paper scrutinizes the effects of adherence to an encoded board configuration on firm efficiency in terms operational and financial performances using an integrated research framework that combines four distinct theories including agency, stewardship, stakeholders and resource dependency models. The research explores three main aspects of compliance outcomes; benefits accrued to conforming firms in terms of enhanced efficiency and market value, board level drivers as well as the external moderators of these benefits using a sample of 127 listed companies on the Nigerian Stock Exchange covering for the period of 1999-2010. Result show that board independence, directors’ cognitive competencies as measured in terms of their educational qualifications and professional experiences are positively associated with efficient management of assets (ROA) and firm stock marketability (Tobin’s q). I find no substantive empirical evidence to suggest that either the adoption of specific leadership structure or directors’ ethnic representation affects firm performance. Moreover, country-level macroeconomic variables, especially the degree of economic openness play a significant role in determining the strength of association between board structure variables and firm performance measures.

Suggested Citation

  • Bello Lawal, 2016. "Still on board configuration: SEC recommendations and the efficiency of adhering firms in Nigeria," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(2), pages 1-23, April.
    • Handle: RePEc:lrc:lareco:v:4:y:2016:i:2:p:1-23
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    References listed on IDEAS

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    Cited by:

    1. Ndaman Abdullahi & Bello Lawal, 2023. "Directors’ Diversity and the Economic Value of Equity," Applied Economics and Finance, Redfame publishing, vol. 10(2), pages 23-36, May.
    2. Firas Farhan Jedi & Sabri Nayan, 2018. "An empirical evidence on the effect of women board representation on firm performance of companies listed in Iraq Stock Exchange," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(1), pages 117-131, January.
    3. Bello, Lawal, 2023. "Women Directors: Revisiting Critical Mass Hypothesis," International Business Research, Canadian Center of Science and Education, vol. 16(7), pages 1-85, July.
    4. Bello Lawal, 2018. "Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 9(2), pages 134-149, April.

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    More about this item

    Keywords

    Board structure; Corporate governance; Firm performance; Macroeconomic variables.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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