THE IMPACT OF CORPORATE GOVERNANCE ON FIRM VALUE OF NIGERIAN QUOTED COMPANIES.

Abstract

The study examined the impact of corporate governance on firm value of Nigerian quoted companies. Corporate governance is a set of mechanisms through which outside investors protect themselves against expropriation by the insiders. The study utilised descriptive statistics, correlation analysis and the ordinary least square (OLS) regression method to analyse the existence of relationships between corporate governance variables and firm value. The study focused all companies and utilised a sample of 50 quoted companies covering a period of 6 years (2013-20 18). The results indicate the existence of a positive and significant impact of board independence and firm value. Board gender diversity measured using the proportion of female board of directors has a positive and statistically insignificant impact on firm value. The variable of board size, measured using the number of board members in each of the companies, has positive and insignificant effect on firm value. Board ethnic diversity has a positive and statistically insignificant influence on firm value among quoted listed companies in Nigeria while the control variables of firm size measured with logarithm of total assets, firm financial leverage measured as ratio of debt to equity as well as firm profitability have positive and statistically significant influence on firm value. The study recommends the inclusion of mixed genders in the board improves firm value and yields optimal results; hence, policy makers and stakeholders should encourage female representation in the board which could mitigate agency problem and improve users’ reliance on corporate financial reports for decision making.