Abstract:
This study examines the effects of board of directors‟ characteristics (BC) (i.e. board size [BSIZE] and diversity [BDIV]; managerial ownership [MOWN]; independent director [INDEP] and proportion of non-executive directors to the executive director [NEDED]) on tax aggressiveness (TA) as measured by the Effective Tax Rate (ETR) of 42 quoted financial service companies in Nigeria (2005 to 2014). The data used were subjected to Hausmans‟ specification test which results in the supremacy of random effect over fixed effect for interpretation purpose while R2 (0.5467) and Wald Statistics (113.91) attests to the individual and joint significance of the independent variables. The study finds that BDIV, INDEP, MOWN and NEDED are statistically significant at 1% and 5% but the more the BDIV and INDEP on board composition the lower the TA while MOWN and NEDED are positively correlated with TA. BSIZE and the control variables (i.e. return on assets, leverage and firm size) were all insignificant. It was concluded that BC has varying impacts on TA, depending on the variable of BC used but recommends reduction in MOWN, increase in BDIV while less attention should be paid to BSIZE with a view to reducing TA and ensuring economic growth in Nigeria
