Board Members’ Experience And Corporate Earnings Quality
Odinakachukwu I Ogaluzor
Department of Accountancy, Rivers State University, Port Harcourt, Nigeria
Gospel J Chukwu
Department of Accountancy, Ken Saro Wiwa Polytechnic, Bori, Rivers State, Nigeria
Keywords: Experience diversity, Stakeholders’ theory, Earnings quality, Accrual quality, Earnings Persistence
Abstract
The purpose of this study was to carry out an investigation on the relationship between experience diversity and earnings quality of quoted insurance companies in Nigeria. The population of the study was all the listed insurance firms whose stocks are quoted on the floor of the Nigerian Stock Exchange as at 31st December 2017. Twenty six insurance companies are listed and a sample of 21 was selected due to availability and completeness of data within the study period. The study exclusively utilized secondary data obtained through published annual reports of the sampled firms. The study relied on positivist philosophy and employed panel data methodology using data covering the period 2008-2017. The analytical technique employed in the study was parametric statistics. The findings of this study showed that: there is significant relationship between experience diversity of the board and the accrual quality of listed insurance companies in Nigeria. It was also found that: experience diversity of the board has significant relationship with earning persistence of listed insurance companies in Nigeria. The study concluded that experience diversity significantly affects a firm’s reported earnings quality. Based on these findings and conclusion, the following recommendations were made: When appointing board members, those who have served previously in other boards of directors should be given preference to hold prominent positions. Also, in order to report earnings that can be sustained, minimum experience requirement should be set to enable majority of the board members’ position to be occupied by those who are well experienced in board matters