The Moderating Influence of Intellectual Capital on the Relationship Between Corporate Governance Attributes and Financial Performance in Nigeria

Abstract:

Corporate governance and intellectual competencies can provide corporate attractiveness and accomplishment. Hence, this study investigated the moderating effects of intellectual capital on the relationship between corporate governance attributes and the financial performance of listed companies in Nigeria. The study adopted ex post facto and correlational research designs. The population of the study was twenty-one (21) listed consumer goods manufacturing firms as of year-end 2020. The study used a census approach to determine a sample size of twenty-one (21) firms. Secondary data from the published annual financial reports of the sampled firms were used for data analysis. Descriptive statistics, correlation coefficient and multivariate analysis were used. The regression analysis revealed that board size has a positive and insignificant relationship with the return on equity of listed consumer goods manufacturing firms in Nigeria; Board independence has a positive and significant relationship with the return on equity of listed consumer goods manufacturing firms in Nigeria; board compensation has a negative and significant relationship with return on equity of listed consumer goods manufacturing firms in Nigeria; board diligence has a positive and significant relationship with return on equity of listed consumer goods manufacturing firms in Nigeria and intellectual capital positively and significantly moderates the relationship between corporate governance mechanism and return on assets of listed consumer goods manufacturing firms in Nigeria. The study concludes that intellectual capital moderates the relationship between corporate governance attributes and the financial performance of listed consumer goods manufacturing firms in Nigeria. The study recommends among others policymakers from listed firms should emphasise good corporate governance practices with quality intellectual input as a means of improving the level of financial performance. Hence, the implementation of corporate governance practices should be in terms of board accountability and transparency through quality human resources for the financial performance of listed firms in Nigeria.