THE MODERATING EFFECTS OF BOARD

COMPOSITION ON COST OF CAPITAL OF

LISTED PHARMACEUTICAL FIRMS IN
NIGERIA.

BY
OKENU JAMES UCHECHUKWU MARYTINA
AK21/MGT/ACC/MSC/026
BACKGROUND OF THE STUDY

A diverse board with Varied perspective and

expertise may affect the firms cost of capital
 Failure
and corporate scandals in pharmaceutical
companies
STATEMENT OF PROBLEM

 The size of the pharmaceutical firms

 Financial leverage
 Board composition
OBJECTIVE OF STUDY

The main objective of this study was to examine the

moderating effects of Board composition on cost of
capital of list pharmaceutical firms in Nigeria
SIGNIFICANT OF STUDY

The work will be significant to the following:

The pharmaceutical firms
The investors
The stakeholders
The scholars
The public
 The government
REVIEW OF RELATED LITERATURE

This study is review under 3 headings:

Conceptual framework
Theoretical framework
 Empirical review
RESEARCH DESIGN

Ex-post facto research design

Population of study
Population 7 listed pharmaceutical company from
2013-2022
Sample size
7 pharmaceutical company
 SUMMARY OF FINDINGS
Below is a summary of this present study’s key findings;

1. Board size has an inverse and statistically insignificant relationship with

weighted average cost of capital of listed pharmaceutical firms in Nigeria. This
suggests that larger boards are associated with slightly lower costs of capital,
although the relationship is not strong enough to be considered significant.
2. Board independence showed an inverse and statistically significant
relationship with weighted average cost of capital of listed pharmaceutical
firms in Nigeria. This suggests that having a higher proportion of independent
directors on the board is related to a slightly lower cost of capital and this is
unlikely to occur by chance.
3. There is an inverse insignificant relationship between Board gender diversity
and weighted average cost of capital of listed pharmaceutical firms in Nigeria.
This suggests that having a higher representation of women on the board is
related to a slightly lower cost of capital.
CONCLUSION
Based on the findings of this present study, It is
concluded that Board composition has a significant
positive effect on the cost off capital of listed
pharmaceutical firms in Nigeria. This is evidenced by
the reduction in the cost of capital of listed
pharmaceutical firms in Nigeria by any slide
improvement in its Board composition.
RECOMMENDATIONS
Based on the findings of this study, the following recommendations
should be considered necessary by managers and other stakeholders;
1. Consider maintaining a larger board size as it may have a slight
positive impact on lowering the cost of capital.
2. Prioritize increasing the proportion of independent directors on the
board to potentially lower the cost of capital.
3. courage greater representation of Women on the board as it may
contribute to reducing the cost of capital. This will help foster an
inclusive board culture that values diverse perspectives and
experiences to leverage the potential benefits in terms of cost of
capital.
CONTRIBUTION TO KNOWLEDGE
The study contributes to the understanding of the
relationship between board composition (specifically,
independent directors and board diversity) and firms’ cost of
capital. It provides empirical evidence that a higher
proportion of independent directors and greater board
diversity are associated with lower cost of capital, indicating
that these governance characteristics contribute to reducing
the firm’s risk perception by investors.
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THANK YOU