Financial Expertise and Religious Diversity of Corporate Boards and Earnings Quality of Listed Firms in Nigeria

Abstract

This research work evaluated the influence of corporate boards’ diversity on earnings quality of listed firms in Nigeria paying exceptional attention to the influence of financial expertise diversity and religious diversity through the Blau’s diversity index; using the Holistic Earnings Management Model (HEMM) with 74 firms sampled through the judgmental sampling techniques for 11 years (2011-2021), the findings of the Robust regression and the OLS regression analysis, revealed that corporate board’s financial expertise diversity and religious diversity exact significant influence on the quality of reported earnings in Nigeria listed firms and consequently it recommended that the Nomination/Governance subcommittee of the board should aggregate seasoned and proven religious practitioners in the corporate board as such would deter earnings management coupled with the Regulatory Authorities encouraging companies to ensure adequate diversity of the board especially in the aspect of financial expertise of board members, as a mix of both academic and professional qualifications in accounting, management, finance and risk/insurance for better earnings quality that would attract investors.