BOARD CHARACTERISTICS AND CORPORATE FAILURE IN THE NIGERIAN MANUFACTURING INDUSTRY: MEDIATING ROLE OF REGULATORY INSTITUTIONS

Abstract

This study explores the relationship between board characteristics and corporate failure in Nigeria’s manufacturing sector, addressing a critical gap in governance research for emerging markets through the lens of agency, stakeholder, and institutional theories. Utilizing a quantitative approach with synthetic data simulating 300 responses from manufacturing firms in Nigeria, the study disaggregates board characteristics into 11 proxies namely size, independence, diversity, committees, meetings, training, evaluation, tenure, expertise, succession, and compensation. Multiple regression analyses, supported by diagnostic tests (Shapiro-Wilk, Breusch-Pagan, Durbin-Watson, VIF), reveal that independence and expertise significantly reduce failure risk, with regulatory institutions partially mediating this relationship (full model R² = 0.102, p < 0.001). A multi-stage random sampling technique, stratified by listing status and subsectors, ensures representativeness from a population of approximately 2,500 firms. The findings offer a context-specific framework for Nigeria’s volatile economic environment, proposing practical measures like mandating 50% board independence and cost-effective training programs to enhance oversight and resilience. Despite robust diagnostics (VIF < 1.05, Durbin-Watson ≈ 2), the use of synthetic data limits generalizability, warranting future validation with real-world surveys. This study contributes actionable strategies to mitigate failure risk and foster sustainable growth in Nigerian manufacturing sector under the African Continental Free Trade Area.