BOARD CHARACTERISTICS AND EARNINGS MANAGEMENT OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA
Keywords:
Board Size, Board Financial Expertise, Board Meetings Attendance, Board Gender Diversity and Earnings ManagementAbstract
The achievement of sustainable development, particularly in the areas of growth and profitability indices, is a shared objective of all business entities. Corporate managers' manipulation of earnings could make it more difficult to reach this ambitious goal. Board characteristics play a crucial role in ensuring that the board fulfills its duty to represent the interests of all stakeholders and to prevent, curtail or reduce any earnings manipulation practice. The study examines the impact of board characteristics on earnings management of listed consumer goods companies in Nigeria using the Srivastava 2019 Cohort Adjusted measure of real earnings management. The study proxied board characteristics by board size, board meetings attendance, board meetings, board financial expertise, and board gender diversity while the dependent variable is earnings management using Srivstava (2019) Cohort Adjusted Measure of real aspect of earnings management, whereas firm size, firm growth, and firm age were used as a control variables. Secondary data were extracted from the annual reports of 16 listed consumer goods companies on the Nigerian Stock Exchange for the period 2011 to 2021. After running the OLS regression, a robustness test was conducted for the validity of statistical inferences, a multiple regression was employed. The study documents that board size and board financial expertise has a negative significant impact on earnings management of the listed consumer goods companies in Nigeria. Furthermore, board meetings attendance has a positive significant impact on the earnings management of listed consumer goods companies in Nigeria, while board meetings and board gender diversity have insignificant relationship with earnings management. In line with the findings, the study recommended that regulatory bodies like FRCN, SEC, and NSE should ensure that listed consumer goods companies in Nigeria strictly adhere to the code of best practice so that the interest of various stakeholders would be fully protected. While the management of the consumer goods companies listed in Nigeria should give much emphasis on inviting directors who are finance experts when considering any specific issue