Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Board Financial Education and Firm Performance: Evidence from the Healthcare Sector in Nigeria

Author(s): Jonah Arumona, Olayinka Erin, Lucky Onmonya, Vincent Omotayo

This study examines the relationship between board financial education and firm performance of companies operating in the healthcare sectorin Nigeria. The study investigates six (6) listed firms in the healthcare sector for the period from 2011 to 2017. Board financial education variables were proxy by bachelor’s degree in finance related courses (BScFin), a postgraduate degree in finance related courses (PGFin) and professional qualification in finance related courses (POFin) while the study controlled for other variable which is the firm size (FMZ). Firm performance was measured using the return on assets (ROA). The fixed effect model of the multiple regression analysis was adopted in testing the three hypotheses developed in this study. The empirical result revealed that all the explanatory variables have a positive and significant relationship with firm performance. This result emphasizes the relevance of financial education for board members irrespective of their educational background. We, therefore, recommend that financial literacy should be considered as a primary pre-requisite for appointments to corporate boards. Also, basic financial training should be a top priority for all firms to assure optimum financial performance. This study provides original insight into board financial education variables that affect the performance of firms operating in the healthcare sector in Nigeria. The study’s finding carries significant importance for company executives, regulatory authorities, policymakers, and future researchers.