Impact of gender dichotomy on dividend payout policy in listed Nigerian financial services firm

Abstract This paper examines the impact of gender dichotomy on dividend payout policy in listed Nigerian financial services firm. A random-panel data methodological approach underpins this study. The study observed an overall panel data of 248 firm-year observations drawn from the sample of 31 financial service firms listed in Nigeria stock exchange between 2010–2017. The findings from the random-panel data regression adopted for the study shows that the presence of female directorship does not significantly influence dividend payout in Nigeria. The rate of dividend payout is highly determined by firm age and their performance. However, we recommend a more diverse board structure, considering the significant effect board size has on dividend payout policy. A more robust and diverse board will create an atmosphere of discipline and control in the organization.


PUBLIC INTEREST STATEMENT
The increased demand of board gender diversity made researchers examine the impact of board gender diversity on organizational outcomes and various aspects of management such as board' supervision and monitoring, reporting quality and firm performance. In this study, we examined the impact of gender dichotomy on dividend payout policy in listed Nigerian financial services firm. Data on the annual report of the sampled firms were used. Results show that the presence of female directorship does not significantly influence dividend payout in Nigeria. The rate of dividend payout is highly determined by firm age and their performance. The study recommends a more diverse board structure considering the significant effect board size has on dividend payout policy.
the acceptance of norms that is reflecting the best interest of stakeholders; women electioneering and participating in the board composition are exclusively necessary as a substance and makes them models and proxies for a balanced scorecard for dividend decision in the wake of corporate governance. Globally, a new trend in corporate governance is emerging with gender diversity gaining remarkable and exploratory dimension with organisational performance. According to Okere et al. (2019), human behaviour is dynamic and shapes the way organisation is managed and controlled, in pursuance of goals relative to entity's congruence; women most likely demonstrates a functional mutually exclusive social, economic, political, educational and legal capacity in influencing corporate decisions. While contextualizing dividend payment and nexus of gender to the fore of corporate economic reality, it is noteworthy that coalition of interest diversity between managers and shareholders is equally imminent; this gap has precipitated constant exposure to the risk of litigation which stems a threat to corporate survival, external networking and competitive repositioning within the business environment.
In reality, mapping out dividend policy is mandatory for a finance manager. However, a sound system of robust dividend disbursement to shareholders' increases market value of equity and helps a firm to set off cost of debt from future earnings potentials while maintaining healthy capital structure finance, as a tentative decision, it only becomes final and conclusive subject to board members' ratification representing stakeholder's interest. In the light of agency theory, corporate managers often use prerogative powers within their jurisdiction to enrich themselves with little or no consideration to what is in the best interest of shareholders (Jensen, 1986), the finance manager has a non-autonomous right to influence dividend payment decision, although it is possible to have a corporate manager whose self-motivated ambition usually capable of significant cash retention for personal benefits rather than distribution to shareholders in the form of dividend or maximizing their portfolio market value and wealth position is complementary to one or more persons in the board structure, the consequence is usually fraud-related and most especially, it creates asymmetrical behavioural relationship in the board committee leading to infringement of stakeholders right and privileges and increased agency cost.
To mitigate the conflicting adventure between managers and stakeholders and protecting the interest of the latter; hitherto, one possible way is to perfectly mix people of diverse characteristics, backgrounds, and experiences to constitute the board, the proportion of female individuals been equitably reasonable of the total population, this is believed to strengthen shareholders confidence while eliminating economic bonding between managers and shareholders and influencing overall decision relative to dividend payout.
This study makes two contributions to the body of knowledge. It main contribution is to the literature gender diversity and dividend payout policy in Nigeria. Secondly, we assessed firm's ability to pay a dividend based on their lifecycle. Existing research has examined empirical nexus of dividend payment on gender diversity with specifically developed algorithms exposed to further intuitive enquiry and adaptive capacity. However, proxies used were limited to CEO duality, the board size, firm age, firm size, etc. In Nigeria corporate environment, over the last decade, the demand for good governance by investors, market regulators, employees, public and government have set a new pace for progressive alliance strongly witnessed in internal coordination, efficient resource utilization and transparent statutory disclosures in financial statement; the decisions sequel to a democratically reinforced women mobilization and nomination at the AGM of firms in Nigeria (Oladipo, Iyoha, Fakile, Asaleye, & Eluyela, 2019a). The central hypothesis of this research concentrated on gender diversity and dividend payment; by examining the proportion of women board member in the board composition and to what empirical extent the dividend payment decision of selected firms is influenced by gender characterization. Our opinion revealed the insignificant relationship between the two variables, and we further suggest that the board composition of a firm should contain reasonable quota of women to ensure the right corporate governance relative of dividend disbursement to shareholders.
The remainder of this study is structured as follows; section 2 reviews various literature on this subject matter; section 3 discusses the methodology and model specification used in the study; Section 4 presents the result and discussions of findings and section 5 shows concluding remarks and recommendations.

Background
Gender diversity and the inclusion of more women in boards of directors and top executive management positions have the potential to add value to organisations. For instance, gender diversity can result in more social sensitivity when solving problems (Woolley, Chabris, Pentland, Hashmi, & Malone, 2010) and increased diversity in thought and result in better company performance (Ernst & Young, 2009). When board members include more gender diversity, a firm may increase its chances of effectiveness due to better understanding their stakeholders' needs, leading to better risk management and general business practice. Decision-making would potentially be enhanced by adding new ideas and perspectives to board and executive management meetings. Groysberg & Bell (2013) found from a survey that 90% of female directors and 56% of male directors said that women add fresh perspectives and thought diversity to boards of directors.
There are two theories of gender diversity in the workplace. They are agency theory and Stakeholder theory (Eluyela et al., 2018b;Okere et.al, 2019;Uwuigbe, Eluyela, Uwuigbe, Obakpro, & Falola, 2018). For this research, we will be focusing on the Stakeholder theory because the agency theory has been over flocked in this area of study.

Stakeholder theory
A popular theory dealing with gender diversity in the workplace is the stakeholder theory, which suggests that there are social benefits from placing women in senior positions (Cabrera-Fernandez, Martinez-Jimenez, & Hernandez-Ortiz, 2016). Westphal & Milton (2000) emphasise that minority groups, such as women and ethnic minorities, often bring unique perspectives that can be used to enhance decision-making. Kramer, Konrad, and Erkut (2006) argue that when a company board includes three or more women, governance is improved through taking into account the perspectives of multiple stakeholders groups, including employees, customers and the community at large. The presence of those women would also enhance decision-making by increasing the likelihood of dealing with difficult issues rather than ignoring them (Kramer et al., 2006). Moreover, Abdullah, Ismail, and Nachum (2016) argue that female directors are preferred by both large and small shareholders, as they are likely to excel in monitoring, an attribute preferred by both groups of shareholders. Nowadays, companies face pressure from various stakeholders, such as institutional investors and the society to appoint females on their boards (Nekhili & Gatfaoui, 2013). Norway has enacted laws to encourage the presence of females in corporations, while the government of Quebec Canada adopted a resolution to gradually increase to 50% the proportion of women sitting on the boards of state-owned firms (Audet, 2006;Francouer, Labelle, & Sinclair-Desgange, 2008, p. 85).

Comparative study of gender dichotomy on dividend payout policy
Several studies looked at the effects of appointment of females as bank directors or promoting them to senior management positions. In their synthesis of studies on the roles of gender diversity in top posts (such as boards of directors, audit committees, CEOs or CFOs), Khlif & Achek (2017) conclude that female representation on such positions led to an increase in the conservativeness of financial reporting and in the level of reporting on social and environmental issues and led to lower tax aggressiveness. On the representation of females on top audit positions, Khlif & Achek (2017) concluded that this led to higher audit fees, shorter report lag and a higher likelihood of an adverse audit opinion being issued. Findings of several studies have suggested that female managers are more likely to take less-risky approaches to business (Carter, Franco, & Gine, 2017). For example, Huang and Kisgen (2013) found that female-led firms are less-risk-takers in that they are less likely to undertake acquisitions or issue debt than male-led firms & Faccio, Marchica, and Mura (2016) found that more reliance on female CEOs leads to a reduction in corporate risk-taking, lower leverage and lower volatility of earnings. Francis et al. (2015) found that female CFOs are associated with lower firm risk, lower levels of dividend payout and more conservative financial reporting.
Empirical studies testify that state-owned firms of emerging markets are under increasing pressure to include women in their boardrooms, primarily, to improve corporate governance (Jonge, 2014). Literature about women in business leadership positions in Jordan is relatively limited. Qasem and Abdullatif (2014) found some discrimination against women in accountingrelated positions in the Jordanian private sector due to characteristics of the Jordanian society and the Jordanian workplace. Radwan, Abed Alaal, Kloub, and Wishah (2017) found similar discrimination against women in leadership positions in the Jordanian public sector. The study on Jordan found that while women are represented to a small degree on top-level managerial positions, gender diversity was found to be associated with better corporate governance implementation and improved board effectiveness in decision-making. In the only study the researchers are aware of that covered women in the banking sector in Jordan, Ahmad and Alshbiel (2016) found that banks with female CEOs had inferior performance compared to those with male CEOs. However, their study can be criticized for measuring the presence of women on executive managements by using a dummy variable based on the CEO position being held by a female (only one Jordanian bank currently has a female CEO) and measuring their presence on boards of directors by using a dummy variable based on the existence of at least one woman on the board (boards of Jordanian banks include different numbers of women). However, in this study, we proxied the presence of women on boards by looking at the number of female directorship on the board structure of sampled firms in Nigeria. Djan, Zehou, and Bawuah (2017) examined the joint role of gender diversity and capital structure on dividend policy of SMEs in Ghana. The study used 1,011 unlisted firms. The results show that the appointment of females on the board does not significantly influence dividend policy. However, dividend policy is influenced by capital structure of the firm. This findings confirmed with the results of Saeed and Sameer (2017) where a comparative study of emerging economies examined. They used a dataset of listed firms from three emerging economies which are: India, China, and Russia. The time frame for their study was 2007-2014. Adopting Agency theory approach, they concluded that board gender diversity is negatively related to dividend payout policy during financial crisis period.

Methods and materials
Our panel data comprising of 31 (out of 54) financial firms listed on Nigeria stock exchange between 2010 to 2017; The sample size was purposively derived via applying Krejcie and Morgan (1970) as cited in Otekunrin et al., 2018;Uwalomwa, Olamide, & Francis, 2015) who believe that 5% of a population is the minimum sample size expedient to make inferences on the entire population. The sample period was selected based on the availability of data. All data were sourced from annual reports of sampled firms. We selected the financial services sector based on the current non-payment of dividends among these firms. To perform the empirical analysis of this study, firstly, we presented the descriptive statistics result showing the measure of central tendency for all variables. Following this, the correlation statistics was used to indicate the absence of multicollinearity among variables. Multicollinearity exists when any variable is 80% correlated with another variable (Ozordi, Adetula, Eluyela, Aina, & Ogabi, 2019).
Furthermore, the Hausman test was presented to determine whether the panel regression model fit the fixed or random effect . A fixed-effect model exists when the probability level of the Hausman test is less than 5% (statistically significant). If otherwise, a random-effect model exists. Finally, from the result of the Hausman test, we then presented the random panel regression result. We adopted the panel regression model in this study because the type of data gathered includes the properties of time series and cross-sectional data (Oladipo, Iyoha, Fakile, Asaleye, & Eluyela, 2019b;Popoola, Asalaye, & Eluyela., 2018).

Model specification
Our baseline model specification was adopted from the work of Chen, Leung, and Goergen (2017) with slight changes. In our model, we added board size, firm size and firm age as other variables not considered in Chen's study.
where the dependent variable, DPOT denotes the dividend payout measured by dividend per share, FDIR represent female directorship measured by the percentage of female directors on the board, BSIZE refers to the total number of directors on the board, FSIZE is firm size measured by the natural logarithm of total assets. The control variable is FAGE which denotes firm age measured by the number of years the company has been in existence. i and t represent industry fixed-effects and year fixed-effects based on Fama and French classification (Chen et al., 2017).

Results and discussion
In this section, the result of the empirical analysis was presented. This analysis includes descriptive statistics, correlation analysis, Hausman test and panel regression analysis. Table 1 shows the descriptive statistics of the data set. It aims at describing the nature and features of the data set. The mean talks about the average value in each of the variables. The variable with the highest mean is BSIZE at 10.82, which shows high performance in respect to other variables. Subsequently, the FDIR standard deviation of 0.11 is the lowest standard deviation when compared with other variables. This indicates that FDIR has a low fluctuation with respect to other variables. The DPS shows that the average dividend per share of sampled firms is between ₦0 to ₦2.4 per share. Lastly, the average board size for the sampled firms is between 5 and 25. This means that the board size of the sampled firms are appropriate for firm's optimum performance as evidenced by (Al-Matari, Al-Swidi, Fadzil, & Al-Matari, 2012) who affirms that a firm with bigger board size has the potential for better performance.  Table 2 shows the relationship between the variables in the data set. Also, it was used to check for multicollinearity in the data set and especially amongst the independent variables. Concerning the benchmark of 80% as recommended by Eluyela et al. (2018a), it can be seen that there is an absence of multicollinearity between the variables under study as the highest correlation is between FSIZE and BSIZE with a relationship of 53%.
The Hausman test is usually carried out to determine which model best suits the panel regression. The rule states: If the P-value is statistically significant, adopt a Fixed Effect Model If the P-value is not statistically significant, choose a Random Effect Model.
As evidence in Table 3, the P-value (0.1133) >5% probability level and this implies that the p-value is not statistically significant. Therefore, a random-effect model was applied for this regression analysis. and dividend payout policy (DPS) of listed firms in Nigeria. The analysis reveals an R-squared of 87% and an adjusted R-squared of 85%. This depicts that 85% of the variation in dividend payout (DPS) is accounted for by the independent variables (FDIR, FAGE, BSIZE & FSIZE). The Durbin Watson is 1.21 which falls within the acceptable limit of serial autocorrelation usually present in time series data. The F-statistics have a value of 37.81231 with a P-value significant at 5% level. The significance of the empirical model reveals that gender dichotomy (FDIR, FAGE, BSIZE & FSIZE) has a significant effect on dividend payout policy (DPS) of listed firms in Nigeria.

The implication of findings
Examining the individual variables, it can be seen that gender dichotomy denoted by (FDIR) has a positive (0.052121) and insignificant (0.1189) relationship with dividend payout policy (DPS) of listed firms in Nigeria. This means that a unit change in gender dichotomy would bring about a 5% increase in dividend payout (DPS) of listed firms in Nigeria. This finding conforms to the results of Francis et al. (2015).  Furthermore, examining the control variables, it is revealed that Firm age (FAGE) has a positive (0.621887) and significant (0.0006) relationship with dividend payout policy (DPS) of listed firms in Nigeria. This depicts that a percentage change in the size of a firm would bring about a 62% change in dividend payout (DPS) of listed firms in Nigeria. Also, Board Size (BSIZE) has a negative (−0.015942) and significant (0.0109) relationship with dividend payout (DPS) of listed firms in Nigeria. This means that a unit change in BSIZE would cause a 2% decrease in dividend payout (DPS) of listed firms in Nigeria. Consequently, firm size (FSIZE) has a negative (−0.007313) and insignificant (0.9221) relationship with dividend payout (DPS) of listed firms in Nigeria. This depicts that a unit change in the size of a firm would bring about a 0.7% decrease in dividend payout (DPS) of listed firms in Nigeria.

Conclusion and recommendations
In this paper, we examined the impact of gender diversity on dividend payout in Nigeria. Prior literature on this issue is scant in developing countries like Nigeria. Our paper concludes that the presence of female directorship does not significantly influence dividend payout in Nigeria. The rate of dividend payout is highly determined by firm age and their performance. This is evidenced in our panel data regression result. The implication of this is that new companies might not be able to meet dividend payment to their shareholders due to their formative growth stage. However, companies in their maturity lifecycle will be able to meet dividend payment. These findings correlate with the work of (Saeed & Sameer, 2017). Our results are consistent with the argument that board diversity enhances the monitoring and creates an atmosphere of discipline for the benefit of the shareholders. But it is worth noting that policymakers in different countries and sectors should not blindly adopt this initiative of gender diversity from another country, but should carefully examine the causality in their context because of differences in national and market policies.
Notwithstanding the essential results, our study is not without limitations. Firstly, we only consider the financial service sector listed on the Nigeria stock exchange for the period 2010 to 2017. Secondly, some studies suggested the adoption of event studies approach to assess the impact of director on financing decisions by comparing the pre and post-appointment period (Beloms, 2015;Chen et al., 2017). However, due to the unavailability of data, we could not capture this in work. Future researches can consider looking at other sectors listed on the Nigerian stock exchange and look at the impact of event studies approach on the study.