MODERATING EFFECT OF INSTITUTIONAL OWNERSHIP ON BOARD CHARACTERISTICS AND TAX AGGRESSIVENESS OF QUOTED FINANCIAL FIRMS IN NIGERIA

Abstract Corporate governance mechanisms, particularly board characteristics, play a pivotal role in influencing tax behaviors. This study examines the moderating effect of institutional ownership on the relationship between board characteristics and tax aggressiveness of listed financial firms in Nigeria. Specifically, it investigates the effect of board financial expertise and board gender diversity on tax aggressiveness, as well as the moderating role of institutional ownership in these relationships. The research adopts an ex-post facto design and utilizes panel data from a sample of 32 listed financial firms on the Nigerian Exchange Group over a 13-year period (2012–2024). Data were analyzed using fixed effect regression model, including moderation analysis with interaction terms. The results showed that board financial expertise has a positive significant effect on cash effective tax rate of quoted financial firms in Nigeria. However, board gender diversity has a negative significant effect on cash effective tax rate of quoted financial firms in Nigeria. While institutional ownership does not moderate the relationships between both board financial expertise, board gender diversity and cash effective tax rate of quoted financial firms in Nigeria. The study recommends that quoted financial firms in Nigeria should prioritize the inclusion of directors with strong financial backgrounds on their boards. Regulatory bodies such as the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) should consider strengthening corporate governance guidelines to encourage or mandate a minimum level of financial expertise on company boards.

0 19 May, 2026

pg: 15

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