Effect of Corporate Board Characteristics on Financial Performance of Listed Service Firms in Nigeria

ABSTRACT: The study examines the effect of corporate board characteristics on the financial performance of listed service firms in Nigeria. Financial performance was measured using return on assets (ROA), while board characteristics were proxied by board size, board independence, board diligence, and board financial expertise. The study was motivated by the inconsistent empirical evidence regarding the role of board attributes in improving firm performance, particularly within the service sector, where performance largely depends on managerial efficiency and effective use of intangible assets. The study adopted an ex-post facto research design and used secondary data obtained from the annual reports of listed service firms on the Nigerian Exchange Group. Out of a population of 20 firms, 17 companies were selected using purposive sampling, and data covering the period 2015–2024 were analyzed. Panel multiple regression analysis was employed to examine the effect of board characteristics and financial performance. The results revealed that board size and board independence have a positive and statistically significant effect on return on assets of listed service firms in Nigeria. However, board diligence and board financial expertise were found to have positive but statistically insignificant effects on financial performance. The study concludes that an effective board structure plays an important role in enhancing the financial performance of listed service firms in Nigeria. It therefore recommends that firms should prioritize board independence, maintain an optimal board size, and strengthen board competency in order to improve financial performance and long-term sustainability.