Effect of Board Characteristics on Financial Performance of Listed Oil and Gas Companies in Nigeria

ABSTRACT The study examined effects of Board Characteristics on financial performance of listed Oil and Gas companies in Nigeria. This study investigated the effect of board characteristics variables of board composition, Audit committee, and board size on financial performance, as measured by return on assets. The study is based on companies that are engaged in Oil and Gas sector of the Nigerian Stock Exchange for the period 2018 to 2022. Secondary data was collected from the publicly available annual reports and accounts of selected Oil and Gas companies. The population of the study is made up of all Oil and Gas companies listed in Nigerian Stock Exchange while the sample size of the study is made of four selected Oil and Gas companies. In testing the hypotheses, multiple regression (OLS) was used. The findings revealed that Board composition has a positive and significant impact on Return on Assets of Oil and Gas companies in Nigerian. The findings also revealed that Audit committee has a positive and significant impact on Return on Assets of Oil and Gas companies in Nigerian, it also revealed that board size has a positive and significant impact on Return on Assets of Oil and Gas companies in Nigerian. The researcher recommends that that a well-composed board can bring different perspectives, which may positively affect financial performance, including ROA. The researcher also recommends that Companies should ensure that the audit committee has well-qualified members with significant experience in financial reporting, audit, and risk management. This will enhance the committee’s ability to oversee financial reporting and contribute to better decision-making, potentially improving ROA. It also recommends that Oil and gas companies should aim to maintain an optimal board size that allows for effective decisionmaking without becoming too large or too small. Large boards may lead to inefficiencies, while smaller boards may lack the diversity of skills needed for strategic decision-making. The optimal board size should reflect the company’s complexity and governance needs.