Professional Management, Board Efficacy and Financial Reporting Quality: Evidence from Stock Markets in Sub-Saharan Africa

Abstract

This study examined the influence of firms’ reliance on professional management (ProMgt) and board efficacy (BodEff) on financial reporting quality (FRQ) of listed firms in Sub-Saharan Africa (SSA). Using the system generalised method of moments (sys-GMM) framework to analyse data from 13 stock exchanges in Africa and 472 firms from 2007 to 2017, the study found that professional management and board efficacy exhibits a positive and significant relationship with financial reporting quality in SSA. Thus, policies aimed at improving financial reporting quality must consider facilitating the engagement of professional management and ensuring board efficacy.

Keywords: Financial reporting quality, Reliance on professional management, Board efficacy, Sub-Saharan Africa

JEL Classification: M41