Influence of Corporate Governance Attributes on Financial Performance of Listed Insurance Companies in Nigeria

Abstract

There is indication that weak corporate governance may not promote high financial performance of companies. This study examined the influence of corporate governance attributes on financial performance of listed insurance companies in Nigeria. The independent variable, corporate governance attributes was proxy board size, composition, independence, meeting, managerial ownership, and gender diversity. The dependent variable, financial performance was represented by Price-Earnings Ratio (P/ER). Data for this study were extracted from the published annual accounts and reports of the twenty-seven listed insurance companies in Nigeria for the period 2012 to 2018. The data were analyzed using Panel Corrected Standard Errors Regression. The results showed that board size and gender diversity have a significant negative effect on P/ER, while board independence and board meeting has a significant positive effect on P/ER. However, board composition has an insignificant negative effect on P/ER, whereas managerial ownership has an insignificant positive effect on P/ER. Based on the results, the study recommended that listed insurance companies should reduce the number of female directors and size of their boards since the current high number does not improve financial performance.