Dividend Policy – Performance Linkages: The Moderating Role of Board Structure Elements in an Emerging Economy

Abstract

This inquiry investigates the moderating role of board size (BS), board independence (BI), and board gender diversity (BGD) on the relationship between dividend policy (DP) and firm performance (FP) in Ghana, a lower-middle income emerging West African economy, south of the Sahara. The study utilized financial data from 14 purposively selected listed firms in Ghana, spanning 2010–2018. A dynamic panel data System-GMM was espoused for the empirical estimation. Results indicate that, while dividend per share (DPS) and dividend payout ratio (DPR) demonstrated significantly positive relationships with FP, dividend yield (DY) exhibited a significantly negative relationship with FP. Additionally, while BI moderated the relationship between DP and FP, BS and BGD had no moderating influence on FP. This inquiry contributes to the literature by incorporating the uncharted board structure metrics of BS, BI, and BGD to assess their moderating role on the relationship between DP and FP from an emerging African economy’s perspective, thus filling an essential lacuna in the extant finance literature.