BOARD COMPOSITION AND FINANCIAL PERFORMANCE: EVIDENCE FROM THE NIGERIAN HOSPITALITY INDUSTRY

Admin/ October 1, 2019/ Journal of Business and Social science/ 0 comments

BOARD COMPOSITION AND FINANCIAL PERFORMANCE: EVIDENCE FROM THE NIGERIAN HOSPITALITY INDUSTRY


1AKINYOMI Oladele John & OMOKEHINDE Joshua Odutola

1&2 Accounting and Finance Department, Mountain Top University, Ogun State, Nigeria

(Corresponding Author 1email: ojakinyomi@mtu.edu.ng;

 2email: joomokehinde@mtu.edu.ng

ABSTRACT

Literature recognized that business collapse and substantial corporate opprobrium in contemporary times have resulted to substantial interests in studies on codes of corporate governance with the aim to enhancing organizational governance in addition to enabling organizational survival. Organizational board represents a fundamental aspect of corporate governance. Board composition ought to be sensitive to its central responsibilities of supervision and monitoring of top management. It should prevent any opportunistic tendencies on the part of executives, and ensure the provision of high quality advice to decision makers so as to improve the management of the business. The study examined the association between board composition and financial performance in the Nigerian hospitality industry. Using ex-post facto design, necessary information for the study was obtained from the audited annual reports of the selected companies. The result of the regression analysis (r= 52.7%, p < 0.012) indicated the existence of a positive and significant association between board composition and financial performance. The result of the study corroborated the assertion in literature that the more the ratio of the non-executive directors to executive directors in the board, the higher the quality of oversight functions provided to such organizations. The study concluded that the structure of corporate board affects the financial performance of such organizations. The study recommended that the ratio of non-executive to executive board members should be increased so as to enhance unbiased, objective and quality corporate governance.

 

Keywords: Governance, Directors, Profitability, Hospitality.

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