Chief Executive Officers’ Attributes and Firm Value in Nigeria

ABSTRACT

This study investigated the link between Chief Executive Officers’ Attributes and Firm Value in Nigeria. It explored the cause-and-effect connection between the observed Chief Executive Officers’ Attributes (CEO) (attributes (CEO gender diversity, CEO tenure, CEO educational qualification, CEO political connection, and CEO national diversity) and Firm Value (Tobin Q). The ex-post facto research design was used to inspect the observed variables. The secondary source of data was used and were sourced from the Nigerian Exchange (NGX) as at 31st December, 2022 for various years. The study covered a time frame of eleven (11) years from 2012 to 2022. The Panel Least Squares (PLS) estimation technique was adopted for analysis purpose. This was carried out with the aid of the E-views (10.0) software and Excel package. Findings obtained revealed that CEO gender diversity, CEO educational qualification and CEO national diversity have negative and significant relationship with firm value (Tobin Q); CEO tenure has a positive and significant relationship with Tobin Q while CEO political connection has a positive but insignificant relationship with Tobin Q. The study concludes that the observed variables, except for CEO political connection, are good predictors of firm value in Nigeria. This study thus recommends that female CEOs should be sensitized on ways of handling more riskier investment decisions that will improve the value of the firm. Also, longer CEO tenure should be maintained by companies to ensure progressive improvement in the corporate value and performance. However, the monitoring and supervisory roles of the non-executive directors (NED) as well as independent non-executive directors (INED) should not be undermined or compromised. In addition, CEOs with higher educational qualification should be sensitized to not only depend on their paper qualifications but also consider corporate economic realities before taking strategic decisions. Lastly, CEOs with foreign identity should uphold the corporate goal, vision and mission and should make personal interest a trivial issue when taking corporate decisions.