BOARD COMPOSITION AND THE PROFITABILITY OF QUOTED MANUFACTURING FIRMS IN NIGERIA

ABSTRACT The composition of a company's board of directors can significantly affect its profitability because companies that prioritize the strategic composition of the board are more likely to succeed in the long run and create value for shareholders. This study looked into the connection between Nigerian quoted manufacturing firms’ profitability and their board composition. The study employed the ex post facto approach. Ten Nigerian manufacturing enterprises that were quoted as of December 31, 2022, provided secondary data for the study. The stock exchange fact book website and the annual reports and accounts of Nigeria's mentioned manufacturing enterprises provided the data (2012 to 2022). Descriptive statistics and the multiple linear regression technique were used to evaluate the generated data. According to the study, there is a statistically significant and negative correlation between board size (BDS) and return on asset (ROA) of quoted manufacturing firms in Nigeria. Additionally, the results showed a significant positive relationship between board independence and the return on asset of Nigerian quoted manufacturing enterprises. The study recommended that quoted manufacturing companies in Nigeria to stick to the minimum and maximum board size requirements outlined in the Nigerian code of governance. It was suggested, therefore, that independent directors should also have the knowledge and experience required for the manufacturing sector

1 01 Dec, 2024

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