Board Attributes and Financial Performance of Listed Oil and Gas Companies in Nigeria

Abstract

Due to the possible impact on company operations and performance, corporate governance has been at the center of company and academic discussion. This paper looked at how board attributes affect the financial performance of companies within Nigerian oil and gas sector. The paper was anchored on Stakeholder’s Theory of Edward Freeman. The paper adopted an expo-facto design as it is focused on a statistical relationship between variables without the manipulation of the independent variable. The paper employed Board Composition and Board Diversity as proxies for Board Attributes while Return on Assets represented the financial performance. However, this paper introduced Firm size as a Control or Moderating Variable to see changes in the performance of the Dependent and the Independent variables. The data from 2010 -2019 financial periods sourced from Machema Ratios were analyzed with the aid of EVIEWS 10.0 software and the findings show that, Board Composition does not affect the financial performance of oil and gas companies in Nigeria. Moreover, there was a significant relationship between Board Diversity and financial performance of Oil and Gas companies in Nigeria. The paper therefore, recommends that for financial performance of the oil and gas industry to increase, there is the need to allow the introduction of foreign directors as the more the proportions of foreign directors on board, the higher the financial performance of the sector.