CORPORATE GOVERNANCE AND FIRM VALUE IN NIGERIA'S INSURANCE SECTOR: PANEL EVIDENCE ON BOARD SIZE, COMPOSITION, AND INDEPENDENCE

Abstract

The article investigates the effect of corporate governance board attributes on the market value of listed insurance firms in Nigeria, using a panel of five NGX-listed insurers over the period 2014–2023 (N = 50 firm-year observations). Three board characteristics - board composition (proportion of non-executive directors, BCOMP), board size (total number of directors, BSIZE), and board independence (proportion of independent directors, BIND) - are examined as governance proxies. Firm value is measured by the natural logarithm of market capitalisation. Firm leverage (debt-to-equity ratio) and return on equity (ROE) are included as control variables. The study applies pooled OLS, fixed effects, and random effects panel regression, with model selection guided by the Hausman specification test (χ²(3) = 6.109, p = 0.191), which favours the random effects estimator. Panel unit root tests (LLC and PP-Fisher) confirm stationarity of all variables at level. Results indicate that board size exerts a statistically significant positive effect on firm value (β = 0.287, p = 0.002), while board composition (β = −0.110, p = 0.389) and board independence (β = 0.006, p = 0.952) are statistically insignificant. Diagnostic tests confirm absence of multicollinearity, serial correlation, and heteroskedasticity. The findings suggest that structural board depth - operationalised as board size - enhances investor confidence and market valuation in Nigeria's insurance sector, while formal compliance with composition and independence requirements does not independently translate into improved firm value. The article contributes sector-specific panel evidence to the corporate governance–firm value nexus in an emerging African insurance market and recommends that regulators shift emphasis from structural box-ticking toward substantive board effectiveness and accountability.