Board-ownership dynamics, dividend policy and shareholders’ wealth of listed firms in sub-Saharan Africa.

Abstract

Corporate failure in Sub-Saharan Africa (SSA) is a testament to adverse board and ownership influence (i.e. board-ownership dynamics). This influence causes the loss of investors’ confidence regarding the maximisation of shareholders’ wealth (SW) through dividend payment. The loss of investors’ confidence has ignited several studies in this field that need appraisal to know their contributions to literature over the years. Thus, this study examines the progress, development, and current issues in the field of board-ownership dynamics (BODy) to determine further research areas. The study further examines the relationships among BODy, dividend policy (DP), and shareholders’ wealth of listed non-financial firms in SSA. The purposive-simple random sampling technique, R Biblioshiny, VOSviewer, and STATA 18 are used to analyse 1,022 Scopus-indexed journals and panel data of 157 listed non-financial firms. The study identifies six streams of research despite contributions from the Corporate Ownership and Control journal, Ntim Collins, the University of Southampton, and the United Kingdom on the subject. Using the post-positivist paradigm and archival data, the study finds that BODy (board size and gender diversity) significantly maximise shareholders’ wealth while CEO duality, managerial, and state ownership diminish SW. DP significantly improves SW directly, but does not mediate the link between BODy (board independence, board meetings, institutional ownership) and SW. However, DP adversely mediates the link between SW and variables like CEO duality, managerial, state, and foreign ownership. Conversely, DP favourably mediates the link between gender diverse boards and SW. BODy is also found to significantly moderate the link between DP and SW. These findings support the dividend relevance, agency, bird-in-hand, resource dependence, outcome, and substitution theories. The study concludes that, other than dividend policy, BODy may maximise shareholders’ wealth in SSA through other strategies like capital gains, CSR initiatives, and risk management. These strategies however require further empirical evidence. The study suggests that policymakers and corporate governance bodies should improve the BODy of listed non-financial firms in SSA through regular board assessment, transparency, accountability, and stakeholder engagement. Further studies should consider the short and long run effects of BODy and DP on SW using Panel Error Correction Model.