Board governance and firm value in emerging markets

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Abstract

We explore how voluntary internal corporate governance (CG) disclosures in Nigeria and South Africa influence the firm value of listed firms, which is proxied by market capitalisation-to-book value, focusing on five internal board disclosures: board size, board meetings, board gender diversity, board audit committee meetings, and board independence. These governance mechanisms are based on Anglo-Saxon regulation, and the unbalanced panel data comprises 1,040 firm-year observations from 104 firms in both countries. The study used the generalised method of moments (GMM) estimation technique, whilst the dynamic ordinary least squares (DOLS) were deployed as a robustness check for additional validity. The results show that board size is positively and significantly associated with firm value. In contrast, audit committee meeting frequency has a significant negative relationship with firm value. Our results show that regulatory bodies and stakeholders must move beyond adherence to CG codes and be guided by the principles, with a bias for competencies and qualities of persons appointed to the board, and uphold clear objectives and effectiveness for board meetings and oversight responsibilities of directors.

Keywords: Corporate Governance, Firm Value, Board Meetings, Audit Committee, Gender Diversity, Board Size, Board Independence

Authors’ individual contribution: Conceptualization — E.A.; Methodology — E.A. and F.O.A.; Software — F.O.A.; Validation — E.A. and F.O.A.; Formal Analysis — E.A. and F.O.A.; Investigation —E.A. and F.O.A.; Resources — E.A.; Data Curation — E.A. and F.O.A.; Writing — Original Draft — E.A. and F.O.A.; Writing — Review & Editing — E.A. and F.O.A.; Visualization — F.O.A.; Supervision — F.O.A.; Project Administration — E.A. and F.O.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D21, D22, F65, G30, G32, G34, L25

Received: 02.02.2025
Revised: 12.04.2025; 26.04.2025; 21.05.2025
Accepted: 27.05.2025
Published online: 30.05.2025

How to cite this paper: Agha, E., & Ashogbon, F. O. (2025). Board governance and firm value in emerging markets. Corporate Ownership & Control, 22(2), 94–108. https://doi.org/10.22495/cocv22i2art9