The Impact of Board Attributes on Dividend Payout: Evidence from the Ghana Stock Exchange

ABSTRACT

This research work studies the impact of corporate governance mechanisms on dividend payout of Ghanaian banks listed on Ghana stock exchange. Panel data of a four-year period, covering 2009 -2012 from the annual reports of the selected banks were used for the study with a GLS regression. The study discovered that corporate governance variables like board size, board gender diversity, audit committee size, and board members‟ educational experience all have significant influence on dividend payout of the banks in Ghana. These results, after consideration showed that the sample banks pay dividends with an aim of minimizing the agency problem by giving shareholders returns on their investment and maintaining the reputation of the banks. This conforms to the signal theory which points out that, dividend payout serve as a signal of expected cash flows and that share prices do not respond to dividend payout in itself but to the information that investors believed changes in dividend levels have for the future prospects of the firm. The study recommends further studies on non-listed manufacturing firms in Ghana.