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Board Characteristics Relating to Firms Performance: A Study on Manufacturing Firms in India


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1 VMKV Engineering College, Vinayaka Missions University, Salem, Tamil Nadu, India
     

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The present research study will throw light on the fact whether board characteristics have any impact on the financial performance of manufacturing companies belonging to Bombay Stock Exchange (BSE) during 2010-11 to 2014-15. This study has investigated the independent variables and dependent variables, i.e. the firm's performance related indicators such as ROA, ROE and Tobins Q which depend upon the accounting and market based measures. The eight independent variables area taken into consideration for the study especially for board characteristics and control variable of the firm which might have some impact on the firms' performance covering 275 companies under 18 major sectors. The OLS regression has been tested to find out the determinant factors of firms' performance in relation to board characteristics. It is observed from the study that board characteristics (size, independence, meeting) are significant negative relationship exists towards firms' performance indicators. In this study further attempt has been made to examine the determinant factors of firms' performance such as board size, board Independence, CEO duality, and size of the firm are significantly influencing factors of manufacturing firms in India.

Keywords

Corporate Governance, Board Characteristics, Firms Performance, Return on Assets, Return on Equity, Shareholders.
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  • Board Characteristics Relating to Firms Performance: A Study on Manufacturing Firms in India

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Authors

G. Palaniappan
VMKV Engineering College, Vinayaka Missions University, Salem, Tamil Nadu, India

Abstract


The present research study will throw light on the fact whether board characteristics have any impact on the financial performance of manufacturing companies belonging to Bombay Stock Exchange (BSE) during 2010-11 to 2014-15. This study has investigated the independent variables and dependent variables, i.e. the firm's performance related indicators such as ROA, ROE and Tobins Q which depend upon the accounting and market based measures. The eight independent variables area taken into consideration for the study especially for board characteristics and control variable of the firm which might have some impact on the firms' performance covering 275 companies under 18 major sectors. The OLS regression has been tested to find out the determinant factors of firms' performance in relation to board characteristics. It is observed from the study that board characteristics (size, independence, meeting) are significant negative relationship exists towards firms' performance indicators. In this study further attempt has been made to examine the determinant factors of firms' performance such as board size, board Independence, CEO duality, and size of the firm are significantly influencing factors of manufacturing firms in India.

Keywords


Corporate Governance, Board Characteristics, Firms Performance, Return on Assets, Return on Equity, Shareholders.

References