Audit Committee Attributes and Listed Firms’ Performance Nexus: A Comparative Study in Ghana and Nigeria

Abstract

Purpose This comparative study examines the interconnection between audit committee attributes and listed firms’ performance among listed companies in Ghana and Nigeria. Design/Methodology/Approach Drawing on agency, stewardship, resource dependence, and institutional theories, the research investigates how audit committee independence, financial expertise, gender diversity, size, meeting frequency, and tenure relate to both accounting‑based (return on assets and return on equity) and market‑based (Tobin’s Q) performance measures. The study uses a mixed-panel approach combining secondary financial and corporate governance data from 20 listed firms on the Ghana Stock Exchange and 22 listed firms on the Nigerian Stock Exchange for the period 2010–2020, together with primary survey responses from 150 corporate governance practitioners and executives in the two countries. Panel econometric techniques, including fixed effects, random effects, and dynamic system GMM estimations, are employed to address unobserved heterogeneity and potential endogeneity. Control variables include firm size, leverage, industry, and ownership structure, while regulatory enforcement intensity is tested as a moderator. Findings Empirical results indicate that audit committee independence and financial expertise are positively associated with accounting‑based performance in both countries, though the magnitude of the effects is larger in Nigeria. Gender diversity on audit committees is positively related to market based performance in Ghana but shows an attenuated and statistically insignificant effect in Nigeria. Audit committee meeting frequency and optimal committee size exhibits nonlinear relationships with firm performance, suggesting diminishing monitoring returns beyond certain thresholds. Tenure and continuity have mixed effects: moderate tenure supports better performance, while excessively long tenure is associated with weaker monitoring outcomes. Ownership concentration and stronger regulatory enforcement amplify the positive effects of financial expertise and independence on performance. Research limitations/implications The study contributes to the corporate governance literature by providing cross-country evidence from two major West African capital markets and by highlighting how institutional differences moderate the audit committee–performance nexus. Policy implications include encouraging disclosure of audit committee expertise, promoting balanced gender representation, and tailoring regulatory interventions to local market conditions to strengthen audit committee effectiveness. The findings also offer practical guidance for boards and investors seeking to improve governance structures to enhance firm value. Originality/Value Audit committees are somewhat treated ceremonially in emerging economies which affects performance. The study concentrates on selected audit committee attributes: independence, financial expertise, gender diversity, size, meeting frequency, and tenure. While other governance features (e.g., board independence, CEO duality, ownership concentration) can influence performance, these variables are treated as control or moderating variables rather than primary explanatory factors. The research employs panel data econometric techniques (fixed effects, random effects, and dynamic panel models such as system GMM) to address unobserved heterogeneity and potential endogeneity; nonetheless, causal inference may be constrained by data limitations and measurement error inherent in secondary disclosures (Wooldridge, 2010).