BOARD DIVERSITY AND MARKET VALUE OF LISTED INSURANCE COMPANIES IN NIGERIA.
Abstract
The appropriate blend of board diversity of companies is still a mirage. Various scholars have come up with suggestions on the appropriate diversity of the board that will enable the firm realize its objectives. However, the extent to which the diversity of the board is related to the market value of firms is still unclear. This study was therefore conducted to investigate the relationship between the diversity of the board and the market value of listed insurance firms. The main objective of the study was to establish whether there is any relationship between board diversity and the market value of firms. The population of the study consisted of twenty three listed insurance firms on the floor of Nigerian Exchange Group from where a sample of eight (8) was selected. The independent variable of the study was the diversity of the board and was proxied by institutional membership, board gender diversity, foreign membership and independent membership, while the market value of firms was proxied by market capitalisation. The study adopted ex post facto research design and the data for the study were obtained from published financial statements of the selected firms in the healthcare and cement companies from 2016 to 2023. The data were analyzed with descriptive statistics, correlation and regression models using SPSS version 20. The findings of the study indicate the existence of a significant positive relationship between institutional board membership, independent membership and board gender diversity and market value. However, foreign membership show insignificant negative relationship with market value of firms. The study concluded that the diversity of the board of directors has significant relationship with the market value of firms. The study amongst others recommends that the board of directors of firms should be strengthened by carefully selecting into the board those with requisite skills and competence. Moreover, membership of the board should comprised of people with different interests.
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