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This study evaluates the effect of director’s tunnelling on asset utilization of companies in consumer goods sector in Nigeria using a panel data collected from annual financial report of thirty listed consumer goods firm in Nigeria between 2011 and 2016. The study was based on ex-post-facto research design and the data collected were analysed using descriptive statistics, correlation analysis and multiple regression. The study finds that the director’s pay and equity holding varies widely among consumer goods firms. Chairman’s pay and director’s equity holding have a statistically significant effect on asset utilization at 5% level. While the director’s pay policy has no statistically significant effect on asset utilization. The finding shows pay, chairman’s pay and director’s equity holding are three major avenues used for tunnelling as they have a significant effect on tunnelling. The study recommends that policymaker should formulate a policy that will reduce the tunnelling tendency of directors and board chairman.
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