Effect of Gender Diversity on Corporate Financial Performance of Multinational Firms in Nigeria

Abstract

This study focused on the impact of gender diversity on the financial performance of multinational companies in Nigeria, the financial performance is gauged on the basis of the return on capital employed (ROCE). The research puts emphasis on three dimensions of governance, that is, female boards, female audit committee composition and the size of the board. The analysis was done based on panel data (10 multinational firms during 15 years, 2010-2025) to test whether gender diversity is related to firm performance using correlation, variance inflation factor (VIF), and regression methods. The findings found out that female audit committee representation produces significant and positive impact on ROCE, which is statistically significant, whereas female board representation has significant positive impact on financial performance as well. Nevertheless, the size of the board was found to have negative but non-significant relationship with financial performance meaning that increased board size can be associated with decreased effectiveness of the decision-making process. The results of the study emphasize the role of female inclusion in government systems, particularly in audit committees and boards, as crucial factors of performance enhancement. The study is original and add value by revealing that gender diversity is statistically significant to the financial performance of multinational firms in Nigeria and that regulators and firms should intensify policies that foster gender inclusiveness at the governance level in Nigeria. The study recommended that Multinational firms should adopt deliberate policies to increase the inclusion of women in decision-making positions, as this has been shown to significantly enhance financial performance.