Board diversity, political connections and firm value: an empirical evidence from financial firms in nigeria

The effect of board diversity, political connections and firm value of listed financial service firms in Nigeria is investigated in this study. Firm value, proxied by Tobin's q and computed as the ratio of the firm's market value of equity to the book value of total assets, is the study's explained variable, while board gender diversity, board nationality, board ethnic diversity, and political connections are the study's explanatory variables. The study’s population consists of fifty-one (51) listed financial service firms on the Nigerian Stock Exchange as at 31st December 2020. Thirty-five (35) of these firms made up the sample size for a period of nine years (2012-2020). Data was gathered from the annual reports of the sampled companies and analyzed using the feasible generalized least square regression (FGLS) approach. According to the study, board gender diversity, board nationality, and board ethnic diversity have a positive significant effect on the firm value of listed financial service firms in Nigeria, whereas political connections had a positive but minor effect. According to the findings, the boards of directors of listed financial service organizations in Nigeria should ensure that females are considered for directorship seats on the boards in order to increase their value, as suggested by the resource dependency theory. Also, the board should be made up of foreign directors in order to lure foreign investors to the firm and enhance its value. In addition, the boards of directors of listed financial services firms in Nigeria should consist of a mix of both northerners and southerners to improve firm value.