BOARD DIVERSITY AND TAX AGGRESSIVENESS OF DEPOSIT MONEY BANKS IN SIERRA LEONE EVIDENCE FROM PANEL DATA ANALYSIS
Keywords:
Board diversity, Corporate Governance, Deposit Money Banks’, Tax AggressivenessAbstract
The board of directors is a fundamental pillar of an effective corporate governance framework, and board diversity has emerged as a key issue in contemporary corporate governance literature. Board diversity is intended to promote a wide range of demographic attributes and cognitive perspectives within the boardroom. This study examined the effect of board diversity on tax aggressiveness among quoted deposit money banks in selected West African countries. Specifically, the study assessed the influence of board age diversity, gender diversity, educational background diversity, and foreign directorship on tax aggressiveness. An ex post facto research design was adopted, and secondary data were obtained from the published annual financial reports of all quoted deposit money banks operating in the selected West African countries, covering a seven-year period from 2017 to 2022. Using a census approach, the entire population of quoted deposit money banks in the selected countries was studied. Tax aggressiveness was measured using effective tax rate–based proxies, while board diversity variables were computed from board composition disclosures. The data were analyzed using descriptive statistics, correlation analysis, and panel regression techniques. The findings revealed that gender diversity has a statistically significant effect on tax aggressiveness, indicating that the presence of female directors influences banks’ tax-related decisions. Educational background diversity, however, exhibited a weak and insignificant relationship with tax aggressiveness. The study concludes that board gender diversity plays a critical role in shaping tax aggressiveness behavior among deposit money banks in West Africa and recommends that regulators and policymakers encourage greater female representation on corporate boards to enhance responsible tax practices.
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