Corporate Board Diversity and Asset Generation of Private Sector Firms in Nigeria

Over the last two decades, the question of board diversity as drivers of effective corporate governance has considerably been on the increase, as a diverse board is believed to be more effective in carrying out its control functions. We examine the relationship between corporate board diversity and asset generation in the Nigerian private sector. We make a case for Nigeria considering that research on the area of board diversity is still at its infancy.  Specifically, we consider gender diversity and foreign directorship as measures of diversity and the effect on total assets. Random effect Panel data multiple regression technique was adopted to analyze the data collected from firms listed on the consumer goods segment of the Nigerian stock exchange (NSE) between 2015-2018. Data were obtained from published financial statements of the sample companies and the Nigerian stock exchange fact book. For the purpose of uniformity, we excluded firms with incomplete records for the period under consideration. The results of the study show a statistically significant and positive relationship between corporate board diversity and total assets. Our study also reveals that the percentage of female directors and foreign directors on the boards of companies listed on the Nigerian stock exchange for the period under review is quite low compared to what is obtainable in other climes. The most recent codes of corporate governance in Nigeria are silent onboard composition and diversity as it gives organizations the powers to appoint directors with the requisite skills and knowledge to chart the affairs of the organization to achieve its set objectives. Considering the positive and significant effect on performance of corporate diversity, we recommend that subsequent codes of corporate governance are more explicit as regards board diversity by specifying a minimum representation of women on boards, foreign directors.