Board Characteristics and Financial Performance of Listed Insurance Companies in Nigeria
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Abstract
This study examined the impact of board characteristics on the financial performance of listed insurance companies in Nigeria. Specifically, it investigated the effect of board size and board gender diversity on Net Profit Margin (NPM) and Return on Assets (ROA). The study was anchored on Agency Theory and adopted an ex-post facto research design. Secondary data were obtained from the audited annual reports of 16 insurance companies listed on the Nigerian Exchange Group (NGX) over the period 2015–2024. Data were analysed using descriptive statistics, Pearson correlation, and panel regression techniques, with company size and company age included as control variables. The findings revealed that board size had no significant effect on Net Profit Margin but exerted a significant positive effect on Return on Assets, indicating that an optimal board size enhances asset utilization and overall firm performance. In contrast, board gender diversity had no significant effect on either Net Profit Margin or Return on Assets. The study concluded that board size is a critical corporate governance mechanism for improving the financial performance of listed insurance companies in Nigeria, whereas board gender diversity has not yet translated into measurable profitability gains. The study recommends that insurance companies maintain an optimal board size that promotes effective monitoring, strategic decision-making, and accountability. It also recommends that regulatory authorities strengthen corporate governance practices by ensuring merit-based board appointments capable of enhancing firm performance.
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References
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Yahaya, O. A. (2025). Digital transformation and internal control effectiveness of listed deposit money banks in Nigeria. Journal of Business and Management Studies.
Ahmed, I. D., Naala, M. N. I., & Gambo, L. S. (2025). Capital structure and the corporate operating performance of oil and gas firms in nigeria. International Journal of Accounting, Management and Economic Review, 1(2), 25-38.
Ajayi, A. O., Musa, S. J., & Odiba, P. S. (2025). Effect of board structure on the financial performance of listed insurance firms in Nigeria. Mrs Journal of Accounting and Business Management, 2(8), 41-50.
Aliyu, A. (2021). Board features and financial performance of Nigerian banks. International Journal of Finance & Banking Studies (2147-4486).
Andoh, J. A., Abugri, B. A., & Anarfo, E. B. (2023). Board Characteristics and performance of listed firms in Ghana. Corporate Governance: The International Journal of Business in Society, 23(1), 43-71.
Aondover, T. A. (2025). Hydrocarbon tax and profitability of listed oil and gas firms in Nigeria. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 5(3), 179-193.
Aondover, T. A. (2025). Impact of Auditor Independence on Audit Quality of Listed Insurance Companies in Nigeria. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 5(2), 73-84.
Aondover, T. A. (2025). Role of Auditor Independence in Enhancing Audit Quality: Evidence from Nigeria’s Insurance Sector. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 5(1), 44-56.
Aondover, T. A. (2025). The impact of Company Income Tax and Petroleum Profit Tax on the profitability of listed oil and gas firms in Nigeria. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 5(1), 34-43.
Awotomilusi, N. S., Ajoloko, O. M., Saka, B. F., Taiwo, E. A., Owonifari, V. O., & Dagunduro, M. E. (2025). Risk management committee attributes and market performance of listed insurance firms in Nigeria. International Journal of Economics and Financial Issues, 15(3), 29.
Balarabe, i., Adamu, M. U., & Mukhtar, M. (2025). Board characteristics and financial performance of nonfinancial firms in Nigeria: a panel data investigation. International Journal of Business Economics and Management Science.
García Martín, C. J., & Herrero, B. (2020). Do board characteristics affect environmental performance? A study of EU firms. Corporate Social Responsibility and Environmental Management, 27(1), 74-94.
H., Ali, B. J., Abdelaziz, M. S., Almsni, F. M., & Oroud, Y. (2024, December). Optimal Board Characteristics for Making Effective Decisions Affecting Financial Performance: An Examination Study. In 2024 International Conference on Decision Aid Sciences and Applications (DASA) (pp. 1-6). IEEE.
Hazaea, S. A., Al-Matari, E. M., Farhan, N. H., & Zhu, J. (2023). The impact of board gender diversity on financial performance: a systematic review and agenda for future research. Corporate Governance: The international journal of business in society, 23(7), 1716-1747.
Imasuen, O. F., Egberi, K. A., & Okoro, E. G. (2025). Board of Directors’ Observable Characteristics and Firms’ Performance: A Case of Nigeria and South Africa. African Journal of Business and Economic Research, 20(3), 229.
Naburgi, M. M., Musa, A. A., & Yinusa, R. A. (2025). Effect of selected corporate characteristics and earnings management of listed insurance companies in Nigeria. International Journal of Education, Business and Economics Research (IJEBER), 5(2), 47-59.
Naburgi, M. M., Musa, A. A., & Yinusa, R. A. (2025). Effect of selected corporate characteristics and earnings management of listed insurance companies in Nigeria. International Journal of Education, Business and Economics Research (IJEBER), 5(2), 47-59.
Ogbulafor, L. et al. (2025) investigated the effect of board characteristics on the financial performance of listed Deposit Money Banks (DMBs) in Nigeria,
Ogwang, J., Kamau, C. G., & Banafa, A. A. (2025).Effect of Board Diversity on the Financial Performance of Insurance Companies in Kenya. Journal of Finance and Accounting, 9(3), 57-66.
Olufisayo, B. A. B. A. L. O. L. A., Ifeoma, O. F., & Amos, A. A. (2025). The Effect of firm attributes and board structures on financial distress of non-financial firms in Nigeria. African Development Finance Journal, 8(3), 169-190.
Osiga, K. O., & Kimutai, C. (2025). Board Characteristics and Shareholder's Value Creation of Insurance Companies Listed in the Nairobi Securities Exchange, Kenya (Doctoral dissertation, Kenyatta University).
Popoola, f. O. Board attributes and financial performance of listed consumer goods companies in nigeria osemwegie-ero joy omehie (phd) department of accounting, benson idahosa university benin city.
Sunny, S. A., & Hoque, M. (2025). The impact of board characteristics on financial performance in an emerging economy: the moderating role of nomination and remuneration committee. European Journal of Management and Business Economics.
Yahaya, O. A. (2025). Digital transformation and internal control effectiveness of listed deposit money banks in Nigeria. Journal of Business and Management Studies.