Research/academic paper

Board Independence and Firm Financial Performance: Evidence from Nigeria

“This study examined the relationship between board independence and firm financial
performance. The key results were that share ownership was highly concentrated in Nigeria, and this structure tended to engender board structures with close family affiliations in which the chief executive officers (CEOs) were active members of audit committees. While family affiliation of board members was found to support firm growth, we found evidence that audit committee membership of chief executives hurt firm performance. We also found that foreign chief executives performed better than their local counterparts. These results suggested the need for Nigerian firms to adopt better corporate governance mechanisms in order to make the boards of directors more independent, avoid unnecessary intervention of CEOs in important committees, and in that way aid financial performance.The main objective of this study was to examine the relationship between measures of board independence and the financial performance of firms listed in the Nigerian Stock Exchange (NSE). “