Is There Relationship between Board Structures and Dividend Policy: Evidence from Nigeria

Abstract

Dividends are considered useful in reducing agency conflicts. The board of directors is the topmost organ of an organisation and directors on board play a major role in addressing agency problems. They also ratify the decisions taken by management prior to execution of the decisions. Studies have reported that corporate governance characteristics influence dividend payout. However, little is known about the influence of board structures that include board size, outside directors, and gender on the decision to pay dividends. This paper is aimed at exploring how board characteristics affect the decision to pay dividends. Using 267 firm-year observations (2013-2015) and random effect logit regression, the study finds board size, outside directors on board, as well as the number of female directors to have great influence on the decision to pay dividends.