Corporate Board Diversity and Firm Performance: Evidence from Nigeria

This paper investigates the impact of corporate board diversity on the financial performance of Nigerian quoted firms using a panel data of 122 quoted Nigerian firms. Aspects of board diversity studied comprise board nationality, board gender and board ethnicity. The Fixed Effect Generalised Least Square Regression is used to examine the impact of board diversity on firm performance for the period: 1991-2008. The results show that gender diversity was negatively linked with firm performance, while board nationality and board ethnicity were positive in predicting firm performance. One of the policy implications of our findings is that foreign board members provide a firm with better qualified candidates who have broader industry experience. Additionally, the presence of women on the board could be perceived by shareholders as a sign of impending significant change, thereby making them more confident in the company’s success, which results in increase in share price.