6533b856fe1ef96bd12b26f7
RESEARCH PRODUCT
Boards of directors: composition and effects on the performance of the firm
C. José García MartínBegoña Herrerosubject
Economics and Econometrics050208 financeCorporate governance; board of directors; size; diversity; independence; CEO power; Tobin’s Q; RObusiness.industryCorporate governance05 social sciencesAccountingTobin's q0502 economics and businessProfitability indexbusinessComposition (language)050203 business & managementDiversity (business)description
This paper analyses the structure of boards of directors and its impact on business performance, which is approximated by economic profitability and the Tobin’s Q ratio. We focus on three basic aspects of boards that have been reviewed in the recent reform of the Good Governance Code: the size of boards, their independence and their diversity. For the study of diversity, we use an index that integrates not only the gender of board members, but also their age and nationality, since these are factors that can influence the knowledge, experience and skills of the directors. The results confirm a high degree of compliance with the recommendations of the Good Governance Code, and suggest that the performance of the advisory and monitoring functions are factors that determine the composition of boards. With respect to the performance of the company, we note that there is a negative and significant relationship with the independence of boards. However, the results are sensitive to the performance measure employed.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2018-01-01 | Economic Research-Ekonomska Istraživanja |