Board Characteristics and Financial Reporting Quality of Listed Insurance Companies in Nigeria: Moderating Role of Profitability
Year: 2025
Type: article
Abstract: This study investigates the moderating effect of profitability on the relationship between board characteristics and financial reporting quality among listed insurance companies in Nigeria. Drawing on agency theory, the study examines board independence, board diligence, and board gender diversity as predictors of financial reporting quality, with profitability as a moderating variable. Firm size and leverage are included as control variables. A causal research design was employed using secondary data from 17 insurance firms listed on the Nigerian Exchange Group over a ten-year period. Descriptive and inferential statistics were conducted using STATA 15.1, with earnings management (Modified Jones Accrual Model) serving as a proxy for financial reporting quality. The results reveal that board diligence significantly enhances financial reporting quality, while board independence and gender diversity do not have direct significant effects. However, profitability significantly moderates the relationship between gender diversity and financial reporting quality, indicating that gender-diverse boards are more effective in loss-making firms. Firm size and leverage showed no significant impact on financial reporting quality. The study concludes that board effectiveness in improving financial reporting quality is contingent on both internal governance practices and financial performance. It recommends enhancing functional board independence, institutionalizing board diligence through regulatory codes, and promoting meaningful gender diversity, particularly in low-profit firms. Context-specific governance reforms and continuous board training are also advised. These findings offer practical implications for policymakers and regulators in emerging markets seeking to improve financial transparency and corporate accountability in sectors with governance vulnerabilities such as insurance.
Authors: Gubio, Dalatu Zanna, Yahaya, Onipe Adabenege, Nyor, Terzungwe
Institution: Nigerian Defence Academy
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7084748500
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