THE RELATIONSHIP BETWEEN CASH FLOW MANAGEMENT AND FINANCIAL PERFORMANCE: THE MODERATING EFFECT OF BOARD INDEPENDENCE

Abstract This study examined the moderating effect of board independence on the relationship between cash flow management and financial performance of listed oil and gas firms in Nigeria from 2012 to 2022. The study employed ex-post facto research design using panel data generated from the sampled firms' annual reports and accounts. The independent variables used are net cash flow from operating activities, net cash flow from investing activities and net cash flow from financing activities while the dependent variable financial performance was proxied by return on assets, board independence was used as the moderating variable. The panel data were analysed using descriptive statistics, correlation matrix and robust Prais-Winsten regression analysis. The findings showed that net cash flow operating activities has significant negative effect the return on assets. However, when moderated, the effect is positive. In contrast, net cash flow from investing activities and financial activities has significant positive effect return on asset. The outcome is different when moderated with board independence. Findings showed that board independence is insignificantly related to return on asset. The study concludes that cash flow management significantly affect financial performance of listed oil and gas firms in Nigeria, however, the direction of this effect changes when moderated with board independence. It is recommended that oil and gas firms enhance operational efficiency to improve net cash flow from operating activities by optimising production processes, reducing operating costs, and implementing effective resource management techniques.