Heterogeneity of Board Membership and Investors' Confidence: An Empirical Appraisal of Listed Consumer Goods Firms in Nigeria

The diversity of the board of directors of companies plays a crucial role in influencing investors’ confidence in such firms. However, investors’ confidence in Nigerian consumer goods firms seems to be influenced by factors other than diversity in board membership. Therefore this study was conducted to determine whether a relationship exists between the heterogeneity of board membership and investors’ confidence in Nigerian consumer goods firms. The independent variable of the study was the heterogeneity of board membership which was proxied by institutional board membership, board membership gender diversity, independent board membership, and board foreign membership; while the dependent variable was investors’ confidence which was proxied by price earnings ratio. The study population comprised of 17 consumer goods firms listed on the floor of the Nigerian Exchange Group within the period of 8 years, spanning 2018 to 2025, from which a sample of eight firms were selected. The study employed an ex post facto research design with data extracted from the selected firms’ published annual reports and accounts. The data obtained were analyzed with descriptive statistics and panel multiple regression model using E-view statistical packages version 10. The findings of the study revealed that institutional board membership (Coeff. = 0.208949, p-value = 0.0131), independent board membership (Coeff. = 2.864794, p-value = 0.0048), and foreign board membership (Coeff. = 1.864002, p-value = 0.0188) all have a significant positive relationship with the price earnings ratio, signifying that the presence of these categories board members influences the confidence of investors in the Nigerian consumer goods firms. However, board membership gender diversity (Coeff. = -0.259755, p-value = 0.9129) has no significant relationship with PER. It was concluded that the diversity of board membership influences investor’s confidence in Nigerian consumer goods firms. The recommendation included the need to include institutional investors in the board of Nigerian consumer goods firms