EFFECT OF CORPORATE GOVERNANCE MECHANISMS ON RELATED PARTY TRANSACTIONS OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

The aim of this research is to examine the effect of corporate governance mechanisms on related party transactions of listed consumer goods companies in Nigeria. The population of the study consists of the twenty one (21) listed consumer goods companies on the Nigerian Exchange Group as at 31st December, 2023. Fourteen of the listed consumer goods companies are selected to form the sample of the study for the period of eleven years (2013-2023). The study employed multiple regressions as tool for analysis. Secondary data obtained from the financial statements of the companies were analyzed. Panel data techniques (fixed and random effects models) were utilized to examine the effect of corporate governance mechanisms on related party transactions, and Hausman specification test confirmed that random effects model was more appropriate for the study. The results show that board size, board independence, board meeting, foreign ownership and number of executive directors on the board have no significant effect on related party transactions, while board gender diversity has a significant positive effect on related party transactions of listed consumer goods companies in Nigeria. The study therefore recommends that, the relevant regulatory bodies in Nigeria should put a quota on the minimum number of female board members consumer goods should have on their board, so that they can bring their bargaining power to optimize the amount of related party transactions that will be beneficial to the company, and increase their shareholders' wealth.