Influence of Chief Executive Officers’ Managerial Attributes on Tax Avoidance of Selected Production Firms in Nigeria

Abstract

The broad objective of this study is to explain the effect of chief executive officers’ attributes on tax avoidance of listed firms in Nigeria. To this end, this study specifically examined the effect of chief executive officers’ tenure, chief executive officers’ share ownership, chief executive officers’ gender and chief executive officers’ nationality on tax avoidance over a 10 year time frame (2012 – 2021) for listed non-finance firms in Nigeria. Notably, this study employed the Upper Echelon Theory as the key theoretical framework noting that the key tenet of the upper echelon theory is that a business organization reflects its top management team which comprises of the chief executive officer. In this study, ex-post factor research design was employed, and fifteen (15) non-finance firms were drawn from a population of one hundred and nine (109) using a non-probability sampling technique procedure. Robust regression analysis technique was employed to test the formulated hypotheses after fulfilling the necessary conditions for obtaining non-spurious regression estimates. Specifically, the result reveals mixed evidence suggesting that the effect of chief executive officers’ attribute on tax avoidance typically depends on the observed or unobserved traits of the CEO. Clearly, the result suggests that higher ownership rights in the hands of the chief executive officer significantly reduces the level of tax avoidance. Therefore, this study recommends among others that to optimize the non-debt tax saving strategy for listed non-finance firms in Nigeria, management of each firm must develop a culture within the organization that values responsible tax planning practices and encourage chief executive officers’ to actively consider minimizing ownership right volume to serve as a strategic tool for gaining tax advantages.