Board Political Affiliation and Financial Performance of Non-Financial Companies in Nigeria

Abstract

The study looks at how board political allegiance affects the financial success of non-financial companies listed on the  Nigerian Stock Exchange. The study's specific goal is to ascertain whether board political affiliation, a component of  corporate governance, influences the financial performance of the company. Return on equity (ROE) and net profit  margin (NPM) were used to measure the company's financial performance. The study employed an ex post facto  research design and a sample of 75 listed non-financial corporations with detailed annual reports that were released during the measure reporting period (2012-2021). Regression using generalized least squares (GLS) was utilized to  analyze the correlation between the variables. The outcome demonstrates that board political membership has a  favorable and significant impact on ROE and NPM at a level of 5%. The study concludes that there should be no  restriction on the number of politically affiliated individuals serving on boards of directors within the parameters of  corporate governance regulations and that political affiliation has a positive and significant impact on companies' NPM, as evidenced by the higher attendance of politically connected individuals, which suggests that board members improve  the company's financial performance and revenue. According to the study, it should always be encouraged for  people with political clout to serve on the boards of Nigerian publicly traded non-financial enterprises.