Effect of Board Characteristics on Financial Performance of Quoted Information Communication and Technology Companies in Nigeria

Abstract

An effective board of directors has been argued to be a panacea for agency problems. This study empirically examined the effect of board characteristics on financial performance of quoted Information Communication and Technology (ICT) companies in Nigeria for a period of five years from 2013 to 2017.Using return on equity (ROE) as measure of financial performance, three board characteristics (board size, independence and gender diversity) were identified as possibly having effects on financial performance. Based on all the seven (7) quoted ICT Companies as at December 2017, correlation and multiple least squares (OLS) regression were used to estimate the relationship between board characteristics and financial performance. Findings revealed that only board independence has significant effect on financial performance. The study recommends that a strong mechanism should be put in place to ensure that board of directors consists mostly of members with no personal interest in the organization.