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EFFECT OF BOARD ATTRIBUTES ON FINANCIAL PERFORMANCE OF QUOTED INSURANCE COMPANIES IN NIGERIA

Araoye Felix and Olatunji Emmanuel
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Araoye Felix: Bells University of Technology, Postal: Audit Department, Ota, Ogun State, Nigeria
Olatunji Emmanuel: Ladoke Akintola University of Technology, Postal: Department of Management and Accounting, Ogbomoso, Oyo State, Nigeria

International Journal of Accounting and Finance (IJAF), 2019, vol. 08, issue 1, 78-96

Abstract: The study examined the effects of corporate governance on financial performance of Nigeria listed insurance companies. It specifically examined the impact ofboard structure, director's equity interest and board activism on financial performance variables such as Return on Equity, Return on Asset and Tobin's Q. The studyutilizedsecondarydata obtainedfromAnnualAuditedReport, NSEFactBookand NAICOM Fact Book of fifteen (15) selected quoted insurance companies. The sampled firms have been in existence for the period 2004-2017. The data collected were analyzed using panel data regression technique. The result revealed that board structure, director's equity interest and board activism had positive impact on performance. The study concluded that there is a positive correlation between corporate governance variables andfinancialperformance ofNigerian insurance companies. The appropriate application ofthese corporate governance variables ensures good performance. The study recommended that insurance companies in the country should put in place a monitoring mechanism to identify the most accurate board structure that will help to sustain improved performance at all time and work out modalities to constantly review appropriate proportion of director's equity interest in relation to the total outstanding shares of the company. The relevant authorities should also ensure improved level of board activism in the industry by establishing relevant regulations with strictenforcement.

Keywords: Corporate governance; Insurance; Performance; Nigeria Stock Exchange (search for similar items in EconPapers)
Date: 2019
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