The Impact of Female Directors on Operating Cash Flow Opacity in Nigerian Listed Consumer and Industrial Goods Manufacturing Firms: The Moderating Role of Accounting Expertise
The Impact of Female Directors on Operating Cash Flow Opacity in Nigerian Listed Consumer and Industrial Goods Manufacturing Firms: The Moderating Role of Accounting Expertise

Summary/Abstract: The increasing financial opacity among corporate entities in Nigeria has raised concerns due to its detrimental effects on economic stability. Specifically, financial reporting opacity can mislead investors and exacerbate agency costs. Agency theory suggests that boards should be established to mitigate these costs. This study examines the influence of female managing directors (FMD) on one aspect of agency cost—operating cash flow opacity —and explores the moderating effect of their accounting expertise on this relationship. A sample of 19 listed manufacturing companies in the consumer and industrial goods sectors in Nigeria from 2012 to 2024 was analysed using an ex-post facto research design. The theoretical framework incorporated agency theory, resource dependence theory (RDT), and critical mass theory (CMT). Data extracted from the firms' annual reports were analysed employing the Panel-Corrected Standard Errors (PCSE) regression technique. The findings reveal a positive relationship between the presence of FMD and operating cash flow opacity. However, further analysis demonstrates that accounting expertise among FMD significantly moderates this relationship, reducing cash flow opacity. It is therefore recommended that listed manufacturing firms include more FMD with accounting expertise, constituting between 20% and 40% of board membership. Such an approach would mitigate cash flow opacity and enhance corporate governance integrity. Future research could extend this investigation to other sectors within the Nigerian economy and incorporate additional moderating or mediating variables to assess the dynamics of the identified relationships.

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