The Impact of Board Structure on Firm Performance: Evidence from Ghana

Abstract

The authors thank the National Science Foundation of China (71371087) for the financial support.

Abstract

Global crises and scandals in the past decades triggered interest in corporate governance, resulting in an increasingly growing regulatory environment, which would lead to more effective corporate governance and improved performance. Thus, the fundamental aim of this study is to examine the relationship between board structure and firm performance among non-financial Ghanaian listed companies. Therefore, to achieve the study's objectives, we collected data on a sample of 28 non-financial companies listed on the Ghana stock exchange (GSE) covering six financial year periods, 2012-2017. The variables such as board size, board composition, CEO duality, and CEO tenure were considered predictors of firm performance. We measured firm performance by employing accounting-based performance measures such as the return on assets (ROA), return on equity (ROE), and earnings per share (EPS) as proxies and, after that, using a multiple regression analysis within a balanced panel data framework. The results confirm that the three predictor variables revealed a significant positive impact on firm performance in Ghanaian listed companies. Based on the study's findings, we consider the study as offering several managerial policy implications that can be helpful to corporate boards, regulators, and practitioners championing the smooth course of corporate governance and firm performance.

Keywords: Corporate governance, Board structure, firm performance, and non-financial listed companies.

DOI: 10.7176/RJFA/10-6-12

Publication date:March 31^st 2019