The Impact of Board Composition on Corporate Dividends Pay-Out: "An Empirical Examination of Industrial Companies Listed in Amman Stock Exchange"

Abstract

This study investigates the impact of board composition on corporate dividends pay-out of a sample of 30 Jordanian industrial companies listed on the Amman Stock Exchange (ASE) during the period (2007-2017). The study examine the  impact of a certain variables that represent board composition (Board size , Independent (non-executive ) director , duality of chief executive officer (CEO) and chairman position , Director nationality , Institutional investors ) .Panel-Data analysis was used to test the empirical model in the current study using a fixed affect model and Random effect model. Relevant data were collected from the (ASE) website and from the annual reports of the sampled companies.The result of the study revealed that there is a negative significant effect between Institutional investors, audit firm and dividend per share (DPS) at the 1% level. Moreover, there is a negative significant effect between Independent director and DPS at the 5% level.  In contrast, board of director size and firm profitability positively affect the DPS at the 5% level. Furthermore, Duality of CEO and chairman position, director nationality, firm size and financial leverage were found to have no effect on DPS at the 5% level.

Keywords: Board Composition, Corporate Governance, Pay-out, ASE

DOI: 10.7176/EJBM/11-27-16

Publication date:September 30^th 2019