DOI: 10.36347/sjebm.2017.v04i11.010

Pages: 822-827

This study investigates the role of board composition in influencing value-added performance for firms in the Nairobi Securities Exchange (NSE) using the fixed effects panel data methodology. Using a sample of 456 firm-year observations obtained from 38 firms for the years 2003 to 2014, we find evidence that board gender diversity (β = 0.0737; p = 0.0265) and board size (β = 0.0934; p = 0.0000) positively and significantly influence value-added performance. However, board independence (β = -0.0830; p = 0.0015) is found to significantly but negatively affect value-added performance. Based on this evidence, we conclude that board gender diversity and board size are significant positive predictors of value-added performance while board independence is a pertinent negative predictor of value-added performance. We therefore recommended that the listed firms increase their board sizes and number of women in their boards but reduce the number of non-executive directors if they seek to compete in the globalised markets.