MODERATING EFFECT OF FREE CASH FLOW ON BOARD ATTRIBUTES AND VALUE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Abstract

This study investigated the moderating effect of free cash flow on the relationship between board attributes and value of listed consumer goods firms in Nigeria. Using an ex-post facto research design, the study analyzed panel data from 18 firms over a ten-year period (2014–2023), focusing on board size, independence, and gender diversity, as well as the interaction of these factors with free cash flow. Panel dynamic regression was adopted has a technique. The results indicate that while board size, independence, and gender diversity alone do not significantly impact market value, free cash flow significantly moderates these relationships. Specifically, the study finds that the interaction between board size and free cash flow has a negative impact on market value. Conversely, board independence combined with free cash flow positively influences market value. Based on these results, the study recommends that regulators consider mandating higher proportions of independent directors on boards to improve free cash flow management and align management actions with shareholder interests, thus enhancing firm value.