Abstract:
The board of directors and the features that characterize them have been
said to have significant effects on firm performance. In this paper, we
examine a number of characteristics of the board of directors of the firms
listed in the Nigerian Stock Exchange (NSE) in order to assess their
impact on firm performance. To achieve this objective, data were
obtained from the firms listed in NSE from 1996 to 2004. Over the nineyear
period of the study, a database of 13,267 directorships was
developed. It was found that the listed firms were characterized with a
fairly small board size (averaging 8.4 persons), and a quarter of the
firms that were studied had members of the same family on their boards
of directors. Furthermore, regression results show that such a pattern of
family control of boardrooms tend to reduce shareholders value and
tends to foster long CEO tenures that may not be justified by improved
firm performance. Whatever its shortcomings as an estimator, our OLS
technique has provided results that seem to offer a reassuring conclusion
that membership of boards of directors should be based on performance,
and that the current wave of family affiliation in Nigerian boardrooms is
not congenial to sound corporate governance and firm performance
