The Relationship Between Board Size and Financial Performance of Quoted Firms in Nigeria

Board size is one of the most extensively studied dimensions of corporate governance, with significant implications for decision quality, management oversight, and ultimately firm financial performance. This study examines the relationship between board size and financial performance among firms listed on the Nigerian Exchange Group, using a large panel dataset covering 80 companies across seven sectors for the period 2018 to 2022. Secondary data are sourced from annual reports and corporate governance disclosure statements, with return on equity, return on assets, and Tobin's Q serving as performance indicators. The study employs panel regression analysis with random effects and tests for non-linear board size-performance relationships using quadratic specification to capture potential diminishing returns to board size expansion. The theoretical framework integrates agency theory with resource dependency theory, recognising that larger boards may enhance monitoring but reduce decision-making efficiency. The study also disaggregates findings by sector to identify whether capital-intensive industries such as oil and gas demonstrate different board size-performance dynamics compared to services firms. Gender diversity, board composition by independent directors, and CEO duality are included as control variables to isolate the pure board size effect. Existing Nigerian evidence on this topic is mixed, with some studies finding positive and others finding negative relationships depending on the sector and time period. This study contributes an updated, cross-sector analysis with policy implications for the Securities and Exchange Commission's corporate governance scorecard and for institutional shareholder engagement strategies. Keywords: board size, corporate governance, financial performance, Nigerian Exchange Group, agency theory