RELATIONSHIP BETWEEN BOARD HETEROGENEITY AND ENVIRONMENTAL PERFORMANCE IN NIGERIAN MANUFACTURING FIRMS

Abstract

This study investigates the relationship between board heterogeneity and environmental performance in Nigerian manufacturing firms, focusing on four key dimensions of board composition, board independence (BIND), board gender diversity (BGEN), board professionalism (BPRO), and board nationality diversity (BNAT), with firm size (FSZ) as a moderating variable. Using a panel dataset of 68 Nigerian manufacturing firms over the period 2015 to 2024, the study employs panel corrected standard errors (PCSE) regression models to address heteroscedasticity and autocorrelation issues. The findings indicate that all four dimensions of board heterogeneity positively influence environmental performance, with firm size enhancing the effect of diversity on sustainability practices. This study contributes to corporate governance literature by demonstrating the importance of board diversity in improving environmental stewardship, particularly in large firms. Conclusively, this study emphasizes the importance of promoting diversity in board composition to improve environmental stewardship. Recommendations include that Nigerian manufacturing firms should prioritize increasing the diversity of their boards, particularly in terms of gender and nationality, to strengthen environmental governance. Additionally, policymakers should consider creating incentives for companies to enhance board diversity as a strategic tool for improving corporate sustainability