This study assessed whether board and audit
effectiveness reduce financial constraint of the non-financial firms in
Nigeria. The KZ index was used to measure financial constraint, and gender
diversity and independence of the audit committee were adopted as determinants
of effectiveness of the board and audit. Using data extracted from the annual
reports of all the 87 listed non-financial firms in the Nigerian Stock Exchange
(NSE), the analysis was done by running the descriptive statistics, correlation
and regression. The results of the analysis showthat gender diversity has negative and significant effect on financial
constraint, while audit committee independence although has negative association, but is not significant in
mitigating financial constraint of non-financial firms in Nigeria. This study
therefore concludes that gender diversity helps save firms from financial
constraint problem, while independence of the audit committee does not mitigate
financial constraint of firms in Nigeria. These simply imply that that while high gender diversity on the boards of directors reduces
financial constraint of firms, independence of the audit committee does not
mitigate financial constraint situation of firms in Nigeria. It was however recommended that firm should ensure more
genderdiversity as it helps unveil
more access to finances, reduces information asymmetry, minimizes agency conflicts, and aids transparent financial reporting and control,
thereby improving access to finance.
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