MODERATING EFFECT OF BOARD EXPERTISE ON THE RELATIONSHIP BETWEEN OPERATIONAL AND LIQUIDITY RISK INFORMATION DISCLOSURE AND CORPORATE MARKET VALUE OF LISTED CONSUMER GOODS COMPANIES OF NIGERIA

Abstract

The study examined the moderating effect of board expertise on the relationship between operational and liquidity risk information disclosure and corporate market value of listed companies in Nigeria's consumer goods sector. Utilizing a Generalized Method of Moments (GMM) approach, data was collected from 540 firm-year observations, covering operational risk disclosure, liquidity risk disclosure, and board expertise attributes. The findings indicate that board expertise significantly moderates the relationship between operational risk information disclosure and corporate market value, enhancing firm performance. However, board expertise negatively moderates the relationship between liquidity risk disclosure and market value, suggesting complexities in how diverse boards manage liquidity risk communications. The study concludes that board expertise plays a significant role in influencing how risk disclosures affect corporate market value. Specifically, while board expertise positively moderates the relationship between operational risk disclosure and corporate market value, it has a negative moderating effect on the relationship between liquidity risk disclosure and market value. Therefore, the study recommends that to leverage the benefits of board expertise effectively, firms should invest in training programs that equip board members with the necessary skills to communicate risk disclosures clearly. These programs should emphasize effective decision-making processes and the importance of cohesive communication strategies, particularly in relation to liquidity risk management