Gender Composition of Board of Directors and Financial Performance: A Case of Selected Companies in Nigeria

Abstract

Like some other countries, the Nigeria Security Exchange Commission in 2011 declared that all listed companies should encourage diversity in the appointment of board members and that the criteria for selection of directors should reflect gender composition, thereby allowing more women on board of listed companies. Despite these declarations there still seems to be low representation of women in mostly top executive positions of companies in Nigeria. It is also unclear whether corporate board gender balance composition improves companies' financial performance in Nigeria given this low representation of women on board. Hence, the need for this study to examine the relationship between board gender composition and companies' financial performance in Nigeria, as well as examining the recent trend in board gender composition of selected companies. The study employed descriptive and correlation analyses for five companies listed on the Nigeria Stock Exchange between 2010 and 2020. The study found near zero positive relationship between companies' financial performance (profit growth rate) and board gender composition (ratio of female representation on board to board size). It revealed that though the board of directors of the companies in Nigeria are still majorly male dominated, the number of female representation on boards has increased marginally during period understudy. The study concludes that gender composition of board member has very small or no significant relationship with company' profit and performance in Nigeria.