Effect of Board Characteristics on Forward-Looking Accounting Information Disclosure in Listed Financial Firms in Nigeria

Abstract

This study examines the effect of board characteristics on forward-looking accounting information disclosure (FLAID) among listed financial firms in Nigeria over the period 2015 to 2024. An ex post facto research design was adopted, given that board attributes such as size, independence, gender diversity, and financial expertise. The study population consists of all fifty-one financial service firms listed on the Nigerian Exchange Group (NGX) as of 2024, covering banks, insurance companies, mortgage institutions, investment firms, and other financial institutions. A census approach was employed to ensure full sector representation and eliminate sampling bias. Secondary panel data were extracted from the audited annual reports of the sampled firms. The study applied the System Generalized Method of Moments (System GMM) estimator to address endogeneity concerns, control for unobserved heterogeneity, and capture the dynamic nature of disclosure practices. The results reveal that board size and financial expertise exert significant positive effects on forward-looking disclosure, while board independence, gender diversity, and firm size show statistically insignificant impacts. The study concludes that enhancing board capacity through optimal size and specialized financial expertise can improve the quality of forward-looking disclosures, thereby strengthening transparency, investor confidence, and informed decision-making in Nigeria’s financial sector. The study recommends among others that the Regulatory bodies such as the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) should set and enforce guidelines that encourage ideal board size, ensuring a balance between diversity and effective decision-making.