Companies’ Financial Outcomes in Nigeria: Does Chief Executive Officer Nationality Matter?
Companies’ Financial Outcomes in Nigeria: Does Chief Executive Officer Nationality Matter?

Summary/Abstract: The purpose of the study is to expand the understanding of corporate governance mechanisms and company performance in Nigeria. In particular, it focuses on the upper echelon and resource dependence theories, which relate to the foreign CEO. The fixed and random effect estimators are employed to identify the variables that influence the performance of public listed companies on the Nigerian Stock Exchange. The empirical analysis shows that CEO nationality, percentage of non-executive directors, board size and board meetings statistically influence company performance. This indicates that these are the relevant corporate governance variables which benefit shareholders. More importantly, the study indicates CEO’s nationality provides a better alignment of interests of shareholders and managers, which increases a company’s competitive advantage. Thus, the results serve as a guide to regulators to design and implement key corporate governance mechanisms in Nigeria to encourage diversification of boards. In addition, the study is one of the few studies that considers this aspect, especially in the Nigerian context and adds to the extant literature on the vital role of foreign CEOs in company performance in Nigeria.

• Details
• Contents