Impact of Firm Performance on Board Characteristics: Empirical Evidence from India

Arora, Akshita; Sharma, Chandan

doi:10.1177/2277975215595559

Cited by 22 publications

(25 citation statements)

References 61 publications

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“…The study explores this relationship empirically, and uses board meeting, found that contradictory results of firms' performance parameters. This results with consistent of previous studies [32] …”

Section: Board Characteristics and Firm Performancesupporting

confidence: 94%

“…However, CEO duality, audit committee size, institutional shareholding and capital gearing ratio cannot be counted to explain the changes in financial performance because they are tested insignificance. To conclude, financial performance can be significantly and positively explained by the board size, board independence, board meeting frequency and firm size and same results is predicted by [32] [33] [34] [35]. Similarly, financial performance can be significantly and negatively explained by the audit committee independence and promoter shareholding and the constituent result with [8].…”

Section: Resultsmentioning

confidence: 67%

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Board Characteristics, Audit Committee and Ownership Structure Influence on Firm Performance of Manufacturing Firms in India

Gurusamy¹

2017

IJBER

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Abstract:The study investigates the relationship and impact of corporate governance measures such as board characteristics, audit committee and Ownership Structure on the financial performance of the selected manufacturing firms listed in Bombay Stock Exchange (BSE). The study empirical in nature and applies panel data regression analysis to a sample of 357 manufacturing firms listed in BSE during the period 2006-2015. The study found that board size is positively and significantly linked to both the financial performance measures, i.e. Return on assets (ROA) and Return on Equity (ROE) but the negative and insignificant impact in case of Tobin's Q. Audit committee independence is significant and negatively affected by ROE. The same promoters' shareholding is negatively and significantly related to all the financial measures and there is an insignificant negative relationship between institutional shareholding and both financial performance measures (Tobin's Q and ROA). The study implies that to improve the performance and accordingly the value of firms, the percentage of promoters' ownership should be decreased as it has positive linkages with the financial performance. The board members have potential knowledge and expertise in the field should be increased as it has aligned with accounting based financial performance. Further, it will help the investors to pay special attention to the corporate governance, audit committee and type of ownership of firms while making the investments.

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Section: Board Characteristics and Firm Performancesupporting

confidence: 94%

Section: Resultsmentioning

confidence: 67%

Board Characteristics, Audit Committee and Ownership Structure Influence on Firm Performance of Manufacturing Firms in India

Gurusamy¹

2017

IJBER

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“…This study contradicts Uwuigbe and Fakile (2012) in studying influence of corporate governance in Nigerian financial sector found a mean of 13 board members and a standard deviation of 2.48. The study also contradicts Arora and Sharma (2015), who examined influence of board characteristics on corporate performance on the Indian firms found a mean of between 4 and 5 board size. Terjesen, Couto and Francisco (2015) evaluated impact of board size on firm performance in 47 countries globally found CV of 33.54 percent.…”

Section: Descriptive Statisticscontrasting

confidence: 65%

Board Size and Financial Performance of Commercial Banks in Kenya

Manyaga¹,

Muturi²,

Oluoch³

2019

RJFA

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Board of directors are individuals appointed to oversee the operations of the firm by shareholders. They ensure that operations of the firm are carried out in a more effective manner. Board size as part of board characteristics contributes positively to the firm's financial performance. Due to agency problems, board size had been expanded to incorporate a variety of expertise and interest groups. However, there is no one board size fit all, the size is determined by the industry and the country of operation. Begging the need for examination of the influence of board size on return on equity of commercial banks operating in Kenya. The target population was 43 commercial banks in operation in Kenya as at 31st December 2017. Secondary data on board size as independent variable and return on equity as a dependent variable for 34 commercial banks for the years 2008 to 2017 was obtained from the internet and perusal of the annual accounts of the individual commercial banks. The study adopted causal research design. Using STATA Version 13 to analyse data, the study used2W both descriptive and inferential statistics. Based on the analysis, the study concluded that overall, board size had a negative but significant influence on return on equity on commercial banks in Kenya. The study also found that board size had a positive and significant influence on return on equity across time. However, in regard to time, board size had a negative but significant variability on return on equity across time. In the case of across banks, board size had a negative but significant influence on return on equity across banks. In consideration of the individual banks, board size had a positive and significant variability on return on equity across banks. The third aspect of groupings, board size had insignificant influence on return on equity across peer. While on individual groups, board size had a positive and significant variability on return on equity across peer. The study recommended a board size of between 6 and 10 board members to embrace a mixture which caters for various interests to facilitate better financial performance.

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“…Surprisingly, it was found that audit committee characteristics negatively correlate with firms' performance during the financial crisis. Arora & Sharma (2015) examined the impact of Indian firms' performance on board directors' characteristics. It was found that firms' performance negatively impacts board characteristics.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of corporate governance practices on firm’s performance: An empirical evidence from Indian tourism sector

Yameen¹,

Farhan²,

Tabash³

2019

Journal of International Studies

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The growth of Indian companies in recent years has led to a change in the nature of the economy which attracted outsider investors from developed countries who demanded robust corporate governance practices from Indian companies which made regulators and competitors gave a great effort to restructure corporate governance. Therefore, this paper aims to investigate the effect of corporate governance practices on firms' performance, with a special reference to the Indian tourism sector. The study uses a panel dataset of 39 hotels listed on Bombay Stock Exchange (BSE) for the period from 2013/2014 to 2015/2016. The ordinary least square regression model is run for estimating the results. Findings show that board directors' size and audit committee's size negatively impact the performance of Indian hotels, while board directors' composition and diligence, the audit committee's composition and diligence, and foreign ownership positively affect the performance of Indian hotels measured by accounting proxies. Results also reveal that board directors' size, audit committee's size, and foreign ownership positively impact the Indian hotels' performance measured by marketing proxies, whereas board directors' composition; board directors' diligence; audit committee's composition; and audit committee's diligence have a negative impact on the performance of Indian hotels.

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Impact of Firm Performance on Board Characteristics: Empirical Evidence from India

Cited by 22 publications

References 61 publications

Board Characteristics, Audit Committee and Ownership Structure Influence on Firm Performance of Manufacturing Firms in India

Board Characteristics, Audit Committee and Ownership Structure Influence on Firm Performance of Manufacturing Firms in India

Board Size and Financial Performance of Commercial Banks in Kenya

The impact of corporate governance practices on firm’s performance: An empirical evidence from Indian tourism sector

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