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Nigeria Journal of Management Sciences (NJMS), Benue State University

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The Effect of Corporate Board Size on Financial Performance of Nigerian Listed Firms

Kajola Sunday O. (Ph.D)*: Department of Accounting Federal University of Agriculture, Abeokuta, Nigeria 234-8033519571

Onaolapo Adekunle A. (Ph.D): Department of Accounting & Management Ladoke Akintola University of Technology, Ogbomoso, Nigeria 234-8033892807

Adelowotan Michael O. (Ph.D): Department of Accounting & Business Administration Distance Learning Institute University of Lagos, Akoka, Nigeria 234-8023032304


This study examines the relationship between board size and financial performance of 35 non-financial firms listed on Nigerian Stock Exchange. The study covers the period 2003-2014. Using panel data regression analysis and Fixed effects model as estimation technique, result reveals a positive and significant relationship between board size (surrogated by the natural log of number of directors on the board) and the two financial performance proxies (Return on assets and Return on equity). The outcome of the study is consistent with some prior empirical studies and provides evidence in support of the argument that companies with larger board members do harness the divergent views of members, thereby coming up with informed decisions that will improve the financial performance of companies under their watch. It is also difficult for chief executive of companies to influence members of the board. For higher financial performance to be achieved, this study recommended an average board size of not less than 9 members for a listed company.

Key words: agency cost, board of directors, corporate governance, financial performance.

To get access to the full text of this article: Faculty of Management Sciences, Benue State University, Makurdi, Nigeria.

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