Board Effectiveness and Employee Engagement: Nigeria Stakeholder Perceptions

Abstract

The objective of this study is to determine whether employee participation yields effective 
board performance. To stimulatedebates inthe stakeholder theoretical perspective in an attempt 
to offer more inclusive approach to strengthen the existing governance structure in 
Nigeria.This research intends to investigate the suitability of employees participating in 
board’s decision-making hierarchy because of their contractual importance as wealth creators 
of the firm. A conceptual model is proposed and tested on public listed companies in Nigeria 
based on survey perception of sampled 154 respondents. The study employs in-depth 
confirmatory factory analysis in a structural equation modeling approach. Building upon 
constructs such as union relations, productivity, and skilled-labor turnover, the study found the 
indicator variables measure employee participation, which focused more on the board’s 
control, operational decisions, and strategy in monitoring, service, and networking roles. 
Hence, we conclude that employees as important contractual company stakeholders affect 
board performance. Builds on the limited research agenda for boards and corporate governance 
that focus on coordinating, exploring and distribution of stakes using adventurous research 
designs and statistical tools, especially in Nigerian emerging economy. This paper exposes the 
firm’s potentials as provider of sustainable and longer-term benefits not only limited to equity
holders, but also to employees as wealth creators, which will improve mutual trust, harmony 
and confidence for more stable and productive outputs that could give visibility to income 
inequality. The paper provides valid measures that link corporate governance debates to 
broader stakeholder perspective.