The causal effect of board size in the performance of small and medium-sized firms

Bennedsen, Morten; Kongsted, Hans Christian; Nielsen, Kasper Meisner

doi:10.1016/j.jbankfin.2007.09.016

Cited by 199 publications

(144 citation statements)

References 30 publications

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“…Secondly, board size may be determined simultaneously with firm performance in any given period (simultaneous endogeneity) or may be determined by past performance (dynamic endogeneity). Previous studies have attempted to overcome these problems by employing instrumental variable techniques (Eisenberg et al, 1998;Postma et al, 2003;Adams and Mehran, 2005;de Andres et al, 2005;Beiner et al, 2006;and Bennedsen et al, 2008), and as shown in Table 1, the results suggest that there is causality from board size to performance. However, although instrumental 8 variable regressions potentially eliminate endogeneity, they require the identification of strictly exogenous instrumental variables which is almost impossible in a corporate governance setting .…”

mentioning

confidence: 97%

The impact of board size on firm performance: evidence from the UK

Guest

2009

The European Journal of Finance

635

478

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We examine the impact of board size on firm performance for a large sample of 2,746 UK listed firms over . The UK provides an interesting institutional setting, because UK boards play a weak monitoring role and therefore any negative effect of large board size is likely to reflect the malfunction of the board's advisory rather than monitoring role. We find that board size has a strong negative impact on profitability, Tobin's Q and share returns. This result is robust across econometric models that control for different types of endogeneity. We find no evidence that firm characteristics that determine board size in the UK lead to a more positive board size -firm performance relation. In contrast, we find that the negative relation is strongest for large firms, which tend to have larger boards. Overall, our evidence supports the argument that problems of poor communication and decision-making undermine the effectiveness of large boards.

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mentioning

confidence: 97%

The impact of board size on firm performance: evidence from the UK

Guest

2009

The European Journal of Finance

635

478

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“…Romano et al (2012) mengungkapkan bahwa jumlah anggota dewan baik dewan direksi maupun dewan komisaris yang optimal adalah tergantung pada kondisi dari masing-masing perusahaan. Selanjutnya Bennedsen et al (2008) menjelaskan bahwa ukuran dewan komisaris berkaitan dengan berbagai karakteristik yang ada pada suatu perusahaan, diantaranya adalah ukuran dan umur perusahaan. Dengan demikian, dapat dipahami bahwa perusahaan dengan board size besar adalah perusahaan yang telah mencapai tahapan maturity dimana kesempatan untuk berkembangan rendah dan tingkat keuntungan yang diperoleh tinggi.…”

Section: Pengaruh Institutional Ownership Terhadap Growthunclassified

“…Penelitian ini menggunakan ukuran dewan komisaris berupa indikator jumlah anggota dewan komisaris suatu perusahaan, sebagaimana telah digunakan oleh beberapa penelitian sebelumnya, yaitu: Garg (2007), Nguyen dan Faff (2007), Bennedsen et al (2008), Gill dan Obradovich (2012), dan Velnampy (2013).…”

Section: Boards Independent (Bdindt)unclassified

Pengaruh Corporate Governance Mechanism Terhadap Nilai Perusahaan Melalui Pertumbuhan, Profitabilitas Dan Kebijakan Dividen

Umar¹

2017

EKUITAS

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ABSRAKPenelitian ini bertujuan untuk menganalisis pengaruh mekanisme corporate governance terhadap nilai perusahaan melalui pertumbuhan, profitabilitas dan kebijakan dividen. Populasi penelitian ini adalah seluruh perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia, periode tahun 2000-2012.Metode pengambilan sampel menggunakan purposive sampling, dengan kriteria bahwa perusahaan tersebut membagikan dividen tunai dan memiliki anggota komisaris independen. Penelitian ini membuktikan bahwa pertumbuhan berpengaruh positif terhadap profitabilitas dan nilai perusahaan, walaupun pada saat itu perusahaan mengurangi pembayaran dividennya. Hasil Sobel test menunjukkan bahwa pengaruh pertumbuhan terhadap nilai perusahaan secara siginifikan dimediasi profitabilitas yang diproksi return on equity. Mekanisme corporate governance berperan dalam mencegah pertumbuhan yang tidak produktif dari perusahaan-perusahaan yang telah mencapai tahap maturity. Peningkatan nilai perusahaan selain dipengaruhi pertumbuhan, juga dipengaruhi oleh kemampuannya dalam meningkatkan profitabilitas dan pembayaran dividen. Variabel institutional ownership dan board size sebagai proksi mekanisme corporate governance berperan mendorong perusahaan untuk meningkatkan profitabilitas. Sedangkan board independent mendorong perusahaan untuk meningkatkan pembayaran dividen. Board Size pada penelitian ini telah menunjukkan peranannya yang sangat penting. Variabel board size sangat berpengaruh terhadap peningkatan profitabilitas, pembayaran dividen, dan capaian nilai perusahaan.Kata kunci: Mekanisme corporate governance, pertumbuhan, return on equity, dividend payout ratio, dan nilai perusahaan.

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“…The effect of board size on firm performance is not clear (Bennedsen, Kongsted & Nielsen 2008;Barroso, Villegas & Pérez-Calero, 2010). A board of directors with many links to the external environment will improve the access of the company to various resources, thus improving corporate governance and firm performance.…”

Section: Size Of the Boardmentioning

confidence: 99%

Boards of directors in SMEs: An empirical evidence of board task performance

Iturralde

Maseda

Arosa

et al. 2016

SAJBM

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This paper seeks to provide a better understanding of what makes boards effective. We analyse the relationships between board demography and company performance and between working structures and board tasks in small and medium-sized enterprises (SMEs). We test our hypotheses on a sample of 307 Spanish SMEs. The main empirical result is the negative impact that the proportion of outside directors and the board size have on firm performance. We also find a negative impact of outsiders' presence and a positive impact of director tenure on the board's service role. Our analysis of the role of board control highlights the negative relationship between this variable and CEO tenure.

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The causal effect of board size in the performance of small and medium-sized firms

Cited by 199 publications

References 30 publications

The impact of board size on firm performance: evidence from the UK

The impact of board size on firm performance: evidence from the UK

Pengaruh Corporate Governance Mechanism Terhadap Nilai Perusahaan Melalui Pertumbuhan, Profitabilitas Dan Kebijakan Dividen

Boards of directors in SMEs: An empirical evidence of board task performance

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