The Effect of Board Size and Composition on Corporate Performance

PurposeThe aim of this paper is to examine the relative influence of regulatory enhancements relating to corporate governance and attributes of business traits on performance of Malaysian listed companies.Design/methodology/approachRegression analysis was performed on all 742 non-financial main board companies listed on Bursa Malaysia using data from 2013 annual reports.FindingsThe results show that the number of board meetings held during the year, role separation and board size have a significant impact on corporate performance. By contrast, independent directors, government ownership and director ownership do not influence corporate performance.Research limitations/implicationsThe study investigated non-financial companies for the financial year 2013. Hence, the results may not apply to financial companies and other years. Future research can perhaps include all types of listed companies and carry out a longitudinal study to gain more comprehensive results and understanding on the relationship between corporate governance and corporate performance. Additionally, future research could also consider employing a different methodology to further unveil factors influencing corporate performance.Practical implicationsThe above findings provide new evidence of the effectiveness of the Malaysian Code on Corporate Governance in improving company performance. The significance of board meetings, role separation and board size shows the importance of internal governance in shaping company processes and hence performance.Originality/valueThe result suggests that although the Malaysian Code on Corporate Governance follows the corporate governance code of developed countries, the applicability of the recommendations to a developing country is evidenced. Companies in Malaysia are predominantly government-owned or closely held, but it appears that role separation matters even in these types of companies in achieving better performance.

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Trends on the relationship between board size and financial and reputational corporate performance

European Journal of Management and Business Economics ◽

10.1108/ejmbe-02-2018-0029 ◽

2018 ◽

Vol 27 (2) ◽

pp. 183-197 ◽

Cited By ~ 6

Author(s):

Luis Antonio Orozco ◽

Jose Vargas ◽

Raquel Galindo-Dorado

Keyword(s):

Empirical Evidence ◽

Corporate Reputation ◽

High Performance ◽

Resource Dependence ◽

Corporate Performance ◽

Resource Dependence Theory ◽

Board Structure ◽

Board Size ◽

Content Type ◽

The Relationship

Purpose The purpose of this paper is to investigate the relationship between board size (B-SIZE) and financial and reputational corporate performance in top companies ranked by the Business Monitor of Corporate Reputation – MERCO in Colombia. Design/methodology/approach This paper conducts correlations and cluster analysis in order to classify firms based on performance and control variables, using a sectional sample of 84 large companies in Colombia over the period 2008-2012. Findings This research founds that large boards are associated with high performance on corporate reputation, as stated by the resource dependence theory, and a low-financial performance, as predicted by the agency theory. However, the results indicate that there is no relation between financial and reputational performance. Research limitations/implications This research considered only large companies listed by MERCO. Therefore, the results can only be generalized for top firms in Colombia according to this list. However, results add empirical evidence to theoretical debate between B-SIZE and firm performance considering financial and reputational indicators. Practical implications According to the OECD manual of good corporate governance practices, the optimal B-SIZE has between five to nine core members. The board structure has a direct impact over the firm’s financial and reputational performance and must be carefully analyzed by shareholders to balance the size according to expected results and firm’s features like family ownership, exportation activities and norms of stock markets. Originality/value This paper contributes to the existing literature on the relationship between B-SIZE and corporate performance with the evaluation of financial and reputational results for the case of an emerging economy. In Latin America, this analysis must go beyond OECD recommendations, and shall consider the context of an emerging country based on empirical evidence.

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The relationship between board size and firm performance

E3S Web of Conferences ◽

10.1051/e3sconf/202125702079 ◽

2021 ◽

Vol 257 ◽

pp. 02079

Author(s):

Cao Chu Yan ◽

Yang Zhi Hui ◽

Liang Xin

Keyword(s):

Board Of Directors ◽

Negative Correlation ◽

Corporate Performance ◽

High Tech ◽

Corporate Board ◽

Board Size ◽

The Us ◽

The Board Of Directors ◽

Empirical Research Methods ◽

The Relationship

This paper selects 372 companies in the US S&P 500 from 2013 to 2017 as a sample, and uses empirical research methods to test the relationship between corporate board size and corporate performance. The results show that there is a negative correlation between the size of the board of directors and corporate performance; after dividing the sample into high-tech and non-high-tech industries, the results show that this negative correlation is more prominent in the high-tech field. After classifying the sample according to the parity of the number of directors, the results show that the odd number of directors is more effective than the even number of directors.

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Board Structure and Firm Performance:Evidence from Emerging Market

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.e4834.018520 ◽

2020 ◽

Vol 8 (5) ◽

pp. 2305-2311

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Performance ◽

Corporate Performance ◽

Emerging Market ◽

Small Sample ◽

Independent Director ◽

Board Structure ◽

Board Size ◽

Firm Financial Performance

This paper fulfils the purpose by studying the effect of corporate board structure i.e., board size and independent director on firm financial performance for selected focused and diversified Indian companies. This study analyses the corporate governance structure of 76 Indian companies (60 focused and 16 diversified companies) listed on the BSE-Sensex for ten years from the year 2007-2016 using panel data analysis. The empirical findings showed a positive relationship of board size with firm performance and significant negative association of independent director with the corporate performance of focused Indian firms, while in the diversified Indian firm, board size found to be positively related to financial performance and independent director found to be negatively related to corporate performance. The result has shown that board structure has seemed to be significant in listed focused firm with firm performance while board structure of diversified firm seems to be insignificant with firm performance, it might be because of small sample size and dynamics of an emerging economy in India which is different from the developed economies of the world. This study implied that in emerging or developing economy like India, lower independent director usually boost company value, and adequate board size will significantly impact on firm performance both in case of focused and diversified firms. This research paper contribute and fill existing gap in literature on corporate governance by examining and establishing relation between firm performance and board structure with focused and diversified Indian firms.

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BOARD SIZE AND CORPORATE PERFORMANCE OF QUOTED COMMERCIAL BANKS IN NIGERIA

International Journal of Research -GRANTHAALAYAH ◽

10.29121/granthaalayah.v7.i1.2019.1059 ◽

2019 ◽

Vol 7 (1) ◽

pp. 328-341

Author(s):

Otuedon Ajuyitse Martins ◽

Ogbole Philip Osemudiamen

Keyword(s):

Commercial Banks ◽

Positive Relationship ◽

Corporate Performance ◽

Negative Relationship ◽

Net Income ◽

Board Size ◽

Standard Size ◽

Secondary Sources ◽

Net Profit ◽

The Relationship

The study examines board size and corporate performance of quoted companies in Nigeria. The objectives of the study are to examine the relationship between board size and total asset of quoted Nigerian banks; to examine the relationship between board size and total revenue of quoted Nigerian banks; to examine the relationship between board size and net profit of quoted Nigerian banks. The study adopted panel research design and census survey approach. The population of this research consists of 21 commercial banks in Nigeria. Data were collected from secondary sources that is audited financial statements. The findings of the study showed that there is a negative relationship between board size and total assets; there is a positive relationship between board size and gross revenue; there is a positive relationship between board size and Net profit. From the above findings, the study concluded that there is a relationship exist between board size and corporate performance of quoted Nigerian banks. The study further recommend that commercial banks and quoted firms must ensure that a proper board of directors is composed in other to institute standards and controls that will boost the net income of the firm; regulatory bodies should ensure that firms constitute a board with a standard size of seven members. The board also must have professionals who have requisite knowledge in the business; firm’s board must ensure that the committees in the board are most effective in safeguarding the asset of the organization and should continuously make decisions that will boost the revenue and net profit of the firm.

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MODERATING EFFECT OF ENTERPRISE RISK MANAGEMENT ON THE RELATIONSHIP BETWEEN BOARD STRUCTURES AND CORPORATE PERFORMANCE

International Journal of Entrepreneurship and Management Practices ◽

10.35631/ijemp.26001 ◽

2019 ◽

pp. 01-15

Author(s):

Saddam Ali Shatnawi ◽

Mustafa Mohd Hanefah ◽

Monther Yahiya Sobhi Eldaia

Keyword(s):

Risk Management ◽

Firm Performance ◽

Corporate Performance ◽

Continuous Process ◽

Enterprise Risk Management ◽

Board Independence ◽

Board Size ◽

Enterprise Risk ◽

Director Ownership ◽

The Relationship

Risk encroachment into Corporate Governance (CG) remains a continuous process that required an efficient and long-term solution. Using enterprise risk management (ERM) as a moderating variable on the relationship between board structures and corporate performance remains an area unexploited in CG research. This relationship can effectively measure by the extent of ERM interactions between board structures and corporate performance. Despite various studies on CG mechanisms, firm performance, ERM implementation level, and gender diversity, the empirical results appeared inconclusive and the findings are inconsistent. None of the studies have addressed the role play by ERM as a moderator between director ownership, the board size, board independence, the total number of women on the board, number of Muslim directors on the board, and firm performance. It is demonstrated that the ERM has the potential to moderate between the different board structures and corporate performance, and this moderation has never been reported in the literature. It is expected that this ERM moderation may considerably improve corporate performance by determining the strength or weakness of the relationship between board structures and firm performance. Thus, this paper, with regards to available literature, conceptualized that ‘ERM’ moderates the relationship between Board Size, Board Independence, Director Ownership, Total Women in the Board, Muslim directors on the Board, and corporate performance.

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