scholarly journals The Impact of Corporate Board Size on Firm Performance: Evidence from Ghana and Nigeria

2017 ◽  
Vol 4 (2) ◽  
pp. 1 ◽  
Author(s):  
LjEbenezer Agyemang Badu ◽  
K.O. Appiah
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Firm Size ◽  
Positive Relationship ◽  
Empirical Support ◽  
Corporate Board ◽  
Board Size ◽  
Listed Firms ◽  
Different Types ◽  
The Impact

This paper examines the impact of corporate board size on firm performance for a sample of 137 listed firms in Ghana and Nigeria. Our findings suggest a statistically significant and positive relationship between board size and firm performance, implying that in Ghana and Nigeria allowing corporate board size to be dependent of firm size tends to improve firm performance. Our findings are consistent across different kinds of models that deal with different types of endogeneities and corporate performance proxies. Our results provide empirical support for agency theory, which suggests that optimal corporate board size effectively advise, monitor and discipline management thereby improving firm performance.

scholarly journals Does Board Size Really Matter? Evidence from Australia

2008 ◽  
Vol 10 (3) ◽  
pp. 331 ◽  
Author(s):  
Lukas Y. Setia-Atmaja
Keyword(s):  
Panel Data ◽  
Agency Theory ◽  
Random Effects ◽  
Inverse Relationship ◽  
Positive Relationship ◽  
Resource Dependence ◽  
Tobin’S Q ◽  
Board Size ◽  
Tobin's Q ◽  
The Impact

This study examines the impact of board size of Australian firms on Tobin’s Q. Agency theory suggests that there is an inverse relationship between board size and Tobin’s Q (Yermack 1996; Eisenberg et al. 1998). The resource dependence argument, however, hypothesizes that larger boards can lead to higher performance as the CEO’s need for advice is a function of the complexity of the organization (Pfeffer 1972; Klein 1998). Analyzing a panel data of 1,530 firm-year observations using random effects technique, this study finds a positive relationship between board size and Tobin’s Q. The random effects regression results also reveal that the positive relationship between board size and Tobin’s Q is driven by firm size as this positive relationship is only found in larger firm sample but not in the smaller firm sample. The overall results support the resource dependence argument.

Corporate Governance and Firm Performance in an Emerging Market

2020 ◽  
pp. 208-226
Author(s):  
Razali Haron ◽  
Anwar Hasan Abdullah Othman ◽  
Naji Mansour Nomran ◽  
Maizaitulaidawati Md Husin
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Positive Relationship ◽  
Emerging Market ◽  
Board Independence ◽  
Board Size ◽  
Huge Data ◽  
Corporate Governance Mechanisms ◽  
Dominant Theory

This study examines the corporate governance mechanisms and how they affect firm performance in Malaysia. After the financial crisis in 1997/98, the CG issues have been the most debated, discussed, and researched in the attempt to improve the CG structure accommodating every economy regardless of the economic landscapes. Using a rich and huge data on Malaysian firms for 16 observation years, this study found that the MCCG has been of a closely referred blueprint by firms in Malaysia to improve firms' performance. Certain CG mechanisms do have significant impact on firm performance. Firms seem to operate in a large board size indicating a positive relationship with performance and board independence. CEO duality is negatively related, in support of separation of roles, complementing the result of board independence and ownership structure as positively related to performance. Agency theory seems to be the dominant theory influencing the CG structure of firms in Malaysia.

scholarly journals Managerial ownership and firm performance on selected JSE listed firms

2015 ◽  
Vol 12 (3) ◽  
pp. 233-241 ◽  
Author(s):  
Sandisiwe Zondi ◽  
Mabutho Sibanda
Keyword(s):  
Firm Performance ◽  
Least Squares ◽  
Agency Theory ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Managerial Ownership ◽  
Retail Sector ◽  
Regression Analyses ◽  
Listed Firms ◽  
And Performance

This paper investigates if there is a relationship between managerial ownership and firm performance in selected firms listed on the JSE, and if so, what that relationship is. The study conducts regression analyses over a sample of 23 retail sector firms, observing data stretching from 2010 to 2013. The results are found to be robust. The results suggest that the hypothesis that a positive relationship exists between managerial ownership and performance be rejected as a negative relationship is found. Instead, the results of a two-stage least squares (2SLS) analysis find that managerial ownership does not impact firm performance in any direction. Overall the results of the study do not support the agency theory, as aligning the interests of managers and shareholders does not improve firm performance, at least within the retail sector

scholarly journals IMPACT OF BOARD STRUCTURE ON FIRM PERFORMANCE IN THE NIGERIAN MANUFACTURING SECTOR

2018 ◽  
Vol 3 (1) ◽  
pp. 56-65
Author(s):  
Rogers A. Akinsokeji
Keyword(s):  
Firm Performance ◽  
Firm Size ◽  
Fixed Effects ◽  
Manufacturing Sector ◽  
Manufacturing Firms ◽  
Board Structure ◽  
Board Size ◽  
General Behaviour ◽  
Panel Data Estimation ◽  
The Impact

In this study, the impact of board structure on firm performance is empirically examined using a large cross section of 50 manufacturing firms in Nigeria and the panel data estimation technique. Both the random and fixed effects methods are adopted to provide robust estimates from the pooled data for the firms over a ten-year period (2005-2014) and the estimations are performed using two measures of firm performance and three measures of board structure. The empirical results from the analysis show that board structure has a significant impact on performance of manufacturing firms in Nigeria. The main source of the impact is through board independence and faintly through board size. However, board composition seems to exert very little effect on firm performance for the sample in the study. Also, firm size is shown to be an essential factor in explaining the general behaviour of firm performance and the pattern of effect that board structure has on firm performance. The effect of size is observed by controlling for it in the performance estimations. The study shows that firm size tends to improve the effect of board structure on performance, apart from EPS. The optimization of board size and composition is desirable for performance especially in a setting like Nigeria with diverse firm characteristics.

scholarly journals Corporate control, agency problem and board composition: Evidence from Indonesia

2015 ◽  
Vol 11 (2) ◽  
pp. 121-131 ◽  
Author(s):  
Tulus Haryono ◽  
Rahmawati ◽  
Yunastiti Purwaningsih ◽  
Muhammad Agung Prabowo ◽  
Eddy Suratman
Keyword(s):  
Agency Theory ◽  
Control Agency ◽  
Agency Problem ◽  
Corporate Control ◽  
Board Composition ◽  
Foreign Investors ◽  
Listed Firms ◽  
Large Shareholder ◽  
Different Types ◽  
The Impact

The study investigates the impact of agency problem and the distribution of corporate control on board composition using a dataset consisting of 190 listed firms in Indonesia. The conceptual framework is derived from agency theory assuming that board composition is endogenously determined by firm’s specific environment. The study reveals that corporate control drives the composition of the board. The different types of large shareholders are found to pursue different strategies in relation to the board composition. While domestic and foreign investors rely on independent board, controlling family prefer to structure a less independent board. This suggests that the battle for corporate control between controlling family, in one side, and unrelated domestic and foreign investors begins with the structure of board. The findings imply that the type of large shareholder does matter in determining the device of corporate control.

scholarly journals The effect of board composition and managerial pay on Saudi firm performance

2021 ◽  
Author(s):  
Mamdouh Abdulaziz Saleh Al-Faryan
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Positive Relationship ◽  
Board Composition ◽  
Board Independence ◽  
Policy Makers ◽  
Listed Firms ◽  
The Impact ◽  
Managerial Pay ◽  
Governance Arrangements

AbstractUsing five empirical methodologies to account for endogeneity issues, this study investigates the effects of board independence and managerial pay on the performance of 169 Saudi listed firms between 2007 and the end of 2014. Studying board independence and managerial pay utilises the main internal governance mechanism in relation to firm performance; therefore, the effect of the 2009 exogenous regulatory shock on board independence was also examined to learn whether it impacted firm performance. The empirical results show that the board composition–performance relationship is endogenous. Strong evidence is found through the dynamic generalised method of moments estimation, which indicates that board composition has a positive relationship with return on assets, and poor past performance of listed firms has a negative impact on the current level of performance. The difference-in-differences approach results show a positive relationship between board composition, stock returns, and Tobin’s Q. The findings also reveal that managerial pay has a positive relationship with firm performance, although when endogeneity is considered, there is a smaller positive relationship and a decrease in significance levels. Thus, pay-for-performance in Saudi Arabia matters, and firms are not simply controlled by the government. The results of this study have implications for both policy makers and investors. In particular, policy makers and Saudi regulators can evaluate the impact of Saudi corporate governance arrangements and, in so doing, highlight changes in corporate governance arrangements that need to be made to achieve their economic objectives, such as Vision 2030. This study also contributes to the literature by showing the importance of considering endogeneity in studies.

scholarly journals Boards of directors and firm performance: A study of non-financial listed firms on the Kuwait Stock Exchange

2021 ◽  
Vol 18 (2) ◽  
pp. 40-47
Author(s):  
Mejbel Al-Saidi
Keyword(s):  
Firm Performance ◽  
Boards Of Directors ◽  
Stock Exchange ◽  
Board Independence ◽  
New Governance ◽  
Board Size ◽  
Board Diversity ◽  
Listed Firms ◽  
Kuwait Stock Exchange ◽  
The Impact

Prior to 2017, there were no corporate governance rules in Kuwait. The previous rules were silent regarding boards of directors, shareholders’ rights, disclosure, and auditing. However, at the beginning of 2017, the Kuwaiti government introduced new governance rules and required all firms listed on the Kuwait Stock Exchange (KSE) to comply with these rules. This study examined the impact of boards of directors on firm performance following the implementation of these new rules using a sample of 89 non-financial listed firms from 2017 to 2019. The study used four board variables – namely, board size, board independence, family directors, and board diversity – and found that, based on Tobin’s results, board size, board independence, and board diversity significantly impact firm performance whereas the ROA results indicate that only family directors significantly impact firm performance

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

scholarly journals The effect of duality/non-duality of CEO, board size, meeting, committee on domestic shareholdings: Empirical evidence from Sri Lanka

2014 ◽  
Vol 11 (4) ◽  
pp. 329-337
Author(s):  
Nadarajah Sivathaasan ◽  
Sivapalan Achchuthan
Keyword(s):  
Sri Lanka ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
Manufacturing Companies ◽  
Regression Analyses ◽  
Board Meeting ◽  
Board Size ◽  
The Impact ◽  
Test Correlation

This paper seeks to investigate the effect of duality/non-duality of CEO, board size, meeting, committee on domestic shareholdings of manufacturing companies listed on Colombo Stock Exchange over a three-year period from 2011 to 2013. The study employs the independent samples t-test, correlation and regression analyses to assess the relationships as well as the impact on domestic shareholdings using a sample of 32 quoted companies ( n =32). It is found that duality & non-duality of CEO structure do not differ in relation to domestic shareholdings that are inconsistent with the hypothesis formulated. Board size (+) and board meeting (+) have shown positive relationship and board committee (-) is negatively associated with domestic shareholdings. As per the empirical results, board committee and board size have significant (p < 0.05) impact on domestic share holdings and insignificant impact is observed by board meeting. The present study concentrates only on the manufacturing sector quoted on Colombo Stock Exchange. This paper has taken an effort to this area of research on emerging share holdings held by local individuals and institutions in Sri Lanka and the findings could be generalized to the companies similar to this category.

scholarly journals The Impact of Board Composition on Firm Performance with Reference to Selected Indian Companies

2020 ◽  
Vol 8 (6) ◽  
pp. 2818-2824
Keyword(s):  
Firm Performance ◽  
Significant Relationship ◽  
Financial Services ◽  
Stock Exchange ◽  
Independent Directors ◽  
Board Composition ◽  
Women Directors ◽  
Board Size ◽  
Size Number ◽  
The Impact

This study examines effects of board composition on firm performance among 24 selected companies which are listed on the National Stock Exchange. It strives to understand the influence of corporate governance by testing 3 variables of board composition namely – board size, number of independent directors and the number of female directors on a company’s profitability measured through the tool – Tobin’s Q. One-way Anova test is used to establish a relationship between each of the three variables of board composition with firm profits. The study is conducted over a period of 5 years from 2013 to 2018 and concentrates on the following sectors - Auto, Financial Services, FMCG, IT, Media, Metal, Pharma, and Realty. The results revealed a significant relationship between board size and number of independent directors with firm profits which meant a firm with a greater sized board or more independent directors also showed higher profits in comparison. While, no significant relationship was found between the number of women directors on a firms’ board and firm performance.

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