Impact of Committees Independence and Gender-Diverse Audit on Scale Efficiency in Nigerian Manufacturing Firms

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Authors: AIGIENOHUWA, Osarenren (Ph.D.), IROWA-OMOREGIE, Osasogie

Abstract

This study examined the impact of audit committee independence and audit committee gender diversity on scale efficiency in Nigerian manufacturing firms. Using a panel research design, the study analyzes data from 49 firms listed on the Nigerian Exchange Group (NGX) between 2012 and 2022. Panel regression analysis was employed to assess the relationship between the independent variables (audit committee independence and gender diversity) and the dependent variable (scale efficiency). The findings revealed that audit committee independence had a negative and statistically insignificant effect on scale efficiency, suggesting that while independent audit committees promote accountability, their impact on operational efficiency is limited without relevant industry expertise. Similarly, audit committee gender diversity showed a negative and statistically insignificant relationship with scale efficiency, implying that diversity alone does not guarantee improved operational performance in the absence of an enabling governance environment. The study also highlighted that leverage negatively affected scale efficiency, underscoring the risks associated with excessive debt levels. These findings emphasize the need for Nigerian manufacturing firms to enhance the effectiveness of independent and gender-diverse audit committees by fostering an inclusive environment and providing members with relevant expertise to improve scale efficiency.

Keywords: Audit committee independence, gender diversity, scale efficiency, Nigerian manufacturing firms, corporate governance

2024 - NIJAF - 16 - 210 AIGIENOHUWA, ET AL. 169-185.pdf

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