Towards Sustainable Corporate Governance and Organizational Growth of Quoted Health Care Companies in Nigeria

Abstract

The purpose of this study is to examine the relationship between three sustainable corporate governance mechanisms (board independence, board size and gender diversity) and one organizational growth measures (return on asset-ROA) of quoted health care companies in Nigeria.  Specifically, this study examines whether board independence, board size and gender diversity affects ROA of quoted health care companies in Nigeria. The population of the study was made up of ten health care companies listed in the Nigerian Stock Exchange (NSE). The study used secondary data for the years 2014-2018, with a sample size of eight listed health care companies based on firms with available data. The study employed multiple linear regression analysis at 90% confidence level due to the sample size of health care quoted companies with available data. The results showed that board independence is significantly related to ROA. However, from this result, board size and gender diversity are not significantly related to ROA.  The study recommends that a high level of board independence with inclusion of reasonable number of non-executive directors in health care firms should be maintained to enhance financial growth. Based on the study result, it was recommended that rather than mere number, the caliber or qualities of people in the board should be considered for right decision-making.  Similarly, the study concluded that gender has no significant impact on organizational growth. Areas for further research have also been recommended by this study.

Keywords: Corporate Governance, Board Independence, Board size, gender diversity, organizational growth.

DOI: 10.7176/EJBM/12-14-08

Publication date:May 31^st 2020