IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 9 NO. 4 2025
DOI: 10.56201/wjfir.v9.no4.2025.pg15.28

---

Do More Diligent Boards Engage in More Tax Planning? Evidence from the Nigerian Agricultural Sector Alutosa Uwomano Ikelegbe

Uzoamaka Maureen Ukoh PeterMario Efesiri Efenyumi Gilbert Ogechukwu Nworie

---

Abstract

Low meeting frequencies, and poor attendance to board meetings are major corporate governance weaknesses that make it difficult or even impossible for firm directors to exert checked influence over tax-related decisions made by the management. This problem often paves room for the adoption of questionably aggressive or opaque tax strategies that threaten not just the long-term sustainability of the firm but also investor trust. Hence, this study examined whether more diligent boards engage in more tax planning using the Nigerian Agricultural Sector as the source of evidence. Board diligence was measured using number of meetings while tax planning was measured using a binary classification based on the effective tax rate, coded as 1 if ETR is less than 30% (tax avoidance) and 0 if Effective Tax rate is 30% or more. Ex-post facto research design was adopted. The population and sample size were made up of five listed agricultural firms in Nigeria. Secondary data were collected from the annual repost of the firms over ten years, 2015-2024. In addition to the descriptive analysis carried out, probit model was used to test the hypothesis. The finding revealed that more diligent boards significantly reduce the likelihood of tax planning among listed agricultural firms in Nigeria (? = -0.4774; p = 0.0006). In conclusion, firms with more engaged boards may be less likely to exploit tax loopholes, contributing to a more ethical and responsible corporate culture. The study recommends that regulatory bodies such as the Securities and Exchange Commission (SEC) and the Nigerian Exchange Group should create and enforce policies that mandate a minimum frequency of board meetings for listed agricultural firms. These policies would help ensure greater board diligence and could mitigate aggressive tax planning, aligning the firms' financial behavior with broader national tax compliance goals.

keywords:

Board Diligence, Tax Planning, Binary Probit Model, Nigerian Agricultural Sector

---

References:

Abdulkadir, K. S., & Aliyu, A. S. (2024). The Effect of Tax Evasion and Avoidance on
Revenue Generation in Nigeria. Journal of Business Development and Management
Research.
Caers, R., Bois, C. D., Jegers, M., Gieter, S. D., Schepers, C., & Pepermans, R. (2006).
Principal?agent relationships on the stewardship?agency axis. Nonprofit Management
and Leadership, 17(1), 25-47.
Dang, V. B. T. (2025). The Impact of Tax Planning, Foreign Board Membership, and ESG
Disclosure on Corporate Value: Empirical Evidence in Vietnam. In Green Economic
Development and Transition to Low-Carbon Economy in the East and Southeast
Asia (pp. 189-204). Singapore: Springer Nature Singapore.
Dominic, I. A., & Wlliams, K. (2025). Impact of Oil and Non-Oil Revenue on Agricultural
Output of Nigeria. International Journal of Research and Innovation in Social
Science, 9(15), 100-114.
Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance
and shareholder returns. Australian Journal of management, 16(1), 49-64.
Ebimobowei, A. (2022). Corporate governance attributes and tax planning of listed
pharmaceutical companies in Nigeria. British journal of management and marketing
studies, 5(1), 1-38.
Emiaso, D., & Okafor, G. O. (2023). Board Diligence and Corporate Financial Performance of
Quoted
Non-Financial
Firms
in
Sub-Saharan
Africa. Journal
of
Global
Accounting, 9(2), 180-194.
Eragbhe, E. & Igbinoba, O. O. (2021). Corporate governance and corporate tax aggressiveness:
a comparative analysis. Journal of Social and Administrative Sciences Studies, 5(1).
Ikuemonisan, E. S. (2024). Challenges and strategies in Nigerian agribusiness entrepreneurship
for sustainable development. CABI Agriculture and Bioscience, 5(1), 1-19.
Islam, M. N., Hashim, F., & Hasan, S. N. (2025). Board Attributes and Corporate Tax
Avoidance: The Moderating Role of Board Gender Diversity. Malaysian Journal of
Business, Economics and Management, 10-15.
Jackson, A. M., Jackson, A. M., & Abraham Ph, D. (2023). Tax planning strategies and
financial performance of listed pharmaceutical companies in Nigeria. BW Academic
Journal, 16-16.
Kang’ara, C. K. (2019). Effect of corporate governance on tax planning of commercial and
service firms listed at the Nairobi securities exchange (Doctoral dissertation,
University of Nairobi).
Keay, A. (2017). Stewardship theory: is board accountability necessary?. International Journal
of Law and Management, 59(6), 1292-1314.
Kofarbai, H. Z., & Yauri, N. M. (2021). Corporate Governance, Risk Management and Bank
Failures in Nigeria: A Case Study of Some Selected Banks. Journal of Finance,
Accounting & Management, 12(1).
Makka, B. E., & Suleiman, S. (2024). Board Attributes and Tax Planning of Listed Consumer
Goods Companies in Nigeria. Journal of the Management Sciences, 61(8), 68-86.
Nwafor, V. O., & Nworie, G. O. (2025). Risk management in Nigerian listed commercial
banks: The significance of board composition (2013–2023). International Journal of
Financial,
Accounting,
and
Management
(IJFAM),
6(4),
525-543.
https://doi.org/10.35912/ijfam.v6i4.2629.
Nwaiwu, J. N. (2024). Tax strategic behaviour and financial performance of quoted agro-allied
firms in Nigeria. International Journal of Business Management, 7(2), 59–84.
Nworie, G. O., Okafor, T. G., & John-Akamelu, C. R. (2022). Firm-level traits and the adoption
of computerised accounting information system among listed manufacturing firms in
Nigeria. Journal of Global Accounting, 8(3), 128-148.
Okpala, N., & Omaliko, E. (2022). Corporate governance mechanisms and tax sheltering:
Evidence from quoted tax aggressive firms in Nigeria. Asian Journal of Economics,
Business
and
Accounting,
22(19),
149–158.
https://doi.org/10.9734/AJEBA/2022/v22i193042
Oladejo, O. F. (2021). Strategy to close tax gaps created by tax avoidance and tax evasion in
Nigeria: an overview. European Journal of Accounting, Auditing and Finance
Research, 9(7), 55-63.
Olawuyi, O. T., Oluwabukola, B. A., & Rachael, U. O. (2025). An Overview of the Imperatives
and Challenges of the Nigerian Tax System. Journal of Commercial and Property
Law, 12(1), 127-135.
Olubunmi, F., Olufemi, A., & Anuoluwapo, A. (2025). Corporate Tax Rate and Investment
Decision: A Study of the Agricultural Sector in Nigeria. International Journal of
Innovative Science and Research Technology, 10(4), 423-433.
Onukelobi, P. C., Anichebe, A. S., & Emeka-Nwokeji, N. A. (2024). Effect of board attributes
on tax planning of non-financial listed companies in Nigeria. Journal of Accounting,
Business and Social Sciences, 8(2), 135–150.
Ordower, H. (2024). Is aggressive tax planning a failure of tax adviser integrity?. Journal of
Financial Crime, 31(4), 837-848.
Otuya, S., & Omoye, A. S. (2021). Thin capitalisation, effective tax rate and performance of
multinational companies in Nigeria. Accounting and taxation review, 5(1), 45-59.
Peter, Z., Hamid, T. K., & Ibrahim, M. (2020). Board attributes and tax planning of listed non-
financial companies in Nigeria. International Journal of Accounting & Finance (IJAF),
9(1), 130–146.
Sanyaolu, W. A., Adejumo, B. T., & Kadiri, I. (2020). Board diligence and financial
performance: evidence from Nigerian Deposit Money Banks. Copernican Journal of
Finance & Accounting, 9(3), 145-160.
Subramanian, S. (2018). Stewardship theory of corporate governance and value system: The
case of a family-owned business group in India. Indian Journal of Corporate
Governance, 11(1), 88-102.
Umar, A., Iheanacho, S., Maigosh, Z. S., & Abubakar, K. S. (2024). Board attributes and tax
planning of listed manufacturing firms in Nigeria. International Journal of Business
and Management Research, 5(3), 1-21.
Uniamikogbo, E. (2024). An Analysis of Corporate Governance Practices and Tax Planning of
Listed Pharmaceutical Companies in Nigeria. International Journal of Contemporary
Research in Marketing and Management Sciences, 1(1), 8-43.
Yahaya, A. (2023). Corporate governance mechanisms and tax avoidance among deposit
money banks in Nigeria. Nigerian Journal of Management Sciences Vol, 24(1a).

DOWNLOAD PDF

---

Back