CORPORATE BOARD DIVERSITY AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA: MODERATED MULTIPLE REGRESSION ANALYSIS OF FIRM SIZE

Abstract

The aim of this study was to examine the effect of corporate board diversity on financial performance of listed industrial goods manufacturing companies in Nigeria. The specific objective was to determine the effect of age diversity, ethnicity diversity and gender diversity on return on assets of listed industrial goods manufacturing companies in Nigeria, with firm size (FSZ) as moderating variable. The study adopted ex-post facto research design on a population of thirteen (13) listed industrial goods manufacturing companies on the Nigerian exchange group. The sample size of eight (8) companies used in the study was determined through purposive sampling. Secondary data were sourced from company’s annual reports over a period of eleven (11) years, covering the years 2014 to 2024. The study carried out some preliminary data tests like descriptive statistics, unit root test, and Panel Least Square (PLS) multiple regression analysis using E-view 12 and SPSS v23 for the purpose of Moderated Multiple Regression (MMR) analysis. The findings indicated that, there is no significant effect of age diversity and ethnicity diversity on return on assets of listed industrial goods manufacturing companies in Nigeria, there is a significant effect of gender diversity on return on assets of listed industrial goods manufacturing companies in Nigeria, there is a significant moderating effect of firm size on corporate board diversity and return on assets of listed industrial goods manufacturing companies in Nigeria. The study concludes that, for industrial goods manufacturing companies in Nigeria, age and ethnicity diversity on the board do not directly influence financial performance, whether measured by return on assets. Gender diversity, however, contributes positively to profitability, indicating that the inclusion of women on corporate boards enhances certain performance outcomes. Furthermore, firm size plays a notable role, it does influence how board diversity affects return on assets, implying that larger or smaller firms experience the effects of diversity differently in terms of asset efficiency. It was suggested amongst other that, since gender diversity significantly improves return on assets, firms should increase the representation of women in board positions to leverage diverse perspectives that enhance profitability.