Board Composition and Company Performance: A Study of Sub-Saharan African Countries

Abstract

In this chapter, we examine the association between board composition and company performance in public companies across Sub-Saharan Africa. By focusing on Sub-Saharan Africa, we extend research on the relationship between board composition and company performance to the countries characterized by weak institutions. Specifically, we examine the impact of specific board composition characteristics, such as foreign directors, outside directors and board size on company performance. We measure company performance by accounting and stock performance. We found that the ratio of foreign directors is negatively associated with accounting performance. The findings indicate a curvilinear association between outside directors and performance. We did not find a significant association between board size and company performance. Furthermore, we found no significant association between board composition and stock performance. This study provides useful insights into the impact of the characteristics of board composition on company performance in Sub-Saharan African countries.