Board Attributes and Value of Listed Insurance Companies in Nigeria: The Mediating effect of Earnings Quality

Abstract

Effective administration of a firm depends largely on the quality and commitment of the board of directors, who are expected to control the activities of the firm based on ethical and professional standards to ensure that corporate affairs are in line with corporate objectives. This study examines the mediating effect of earnings quality on the relationship between corporate board attributes and the value of listed insurance companies in Nigeria. The study utilized secondary sources of data collected from annual reports of the sampled companies for the periods 2009 to 2018. The population of the study comprises of all twenty seven (27) insurance companies listed on the Nigerian stock exchange, out of which fifteen (15) were selected as study sample. Data generated were examined by means of descriptive statistics to provide summary statistics for the variables and subsequently, correlation analysis was carried out using Pearson correlation technique for the correlation between the dependent, independent variables and the mediating variable. Path analysis using Structural Equation Modeling was used; also Monte Carlo’s test was employed to determine the significant of the indirect effect. It was found that board size, board meetings and women directorship significantly affect firm value. It also reveals that board size and board independence significantly affects earnings quality of listed insurance companies in Nigeria. Furthermore, the study finds that earnings quality does not significantly mediates the relationship between board size, board independence, women director, board meeting and firm value. However, it is mediating partially. This indicates that board attributes through the quality of the reported earnings a higher firm value will be achieved. Hence the study concludes that the direct association between boards attributes mechanisms and firm value is more crucial than their indirect association mediated by the earnings quality. Thus, the study recommends that investors should pay more attention to companies with high number of directors, as provided in the NAICOM code of corporate governance. Also, in order to have proper checking by independent directors, NAICOM should also ensure a strict adherence to the provision of the code to improve the quality of earnings and enhance the value of the listed insurance companies in Nigeria.

Capital Structure and Firm Financial Performance of Listed Deposit Money Banks in Nigeria: Moderating Effect of Board Financial Literacy

“…Performance Liu (2011) opined that board of directors (BOD) is an essential aspect of corporate governance that is saddle with the responsibility to affect managerial decision. Board of directors is essential key indicator of corporate governance which is saddled with the task to improve the effectiveness and efficiency in every organization (Muhammad & Kurawa, 2021). Financial literacy of the board could have positive or a negative effect on a firm financial efficiency depending on the financial know how of the members constituted in the (BOD) in relation to capital structure which could have a positive impact on the firm financial performance.…”

Corporate Governance Practices and Firm Performance in Savings and Credit Cooperative Societies in Nairobi County, Kenya

“…Some scholars assert that board composition may be easily differential into inside directors, affiliated directors and outside directors (Nasiru & Ahmed, 2021). Past studies notes that the board composition distinction is derived from the extent of their participation in firm management (Mohammed & Kurawa, 2021).…”

“…Scholars opine that board size refers to the total number of directors that can influence the board's functioning and effectiveness (Qaderiet al, 2022).Existent literature posits that board size is the complete number of directors appointed to serve on the corporate board of a firm (Kyei, Werner, & Appiah, 2022). Scholars aver that board size represents the number of people that make up corporate board and that determine how effective it discharges its fiduciary responsibilities (Mohammed & Kurawa, 2021).For the purpose of this study, board size is defined as the total number of directors on the corporate board of each sampled firm which is inclusive of the chairperson of the board, the chief executive officer or managing director, executive directors and nonexecutive directors in a given financial year (Goel et al, 2022).…”