The Impact Of Board Size On Firm Performance

There are three internal and one external governance mechanisms used for owners to govern managers to ensure they comply with their responsibility to satisfy stakeholders and shareholder’s needs. First, ownership concentration is stated as the number of large-block shareholders and the total percentage of the shares they own (Hitt, Ireland, Hoskisson, 2017, p. 317). Second, the board of directors which are elected by the shareholders. Their primary duty is to act in the owner’s best interest and to monitor and control the businesses top-level managers (Hitt, Ireland, Hoskisson, 2017, p. 319). Third, is the

Kajola (2009) examined corporate governance and firm performance in Nigeria The result reveals that there is a significant relationship between Return on Equity (ROE) and board size as well as chief executive status. The study further reveals a positive significant association between Profit Margin (PM) and chief executive.

Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint

As Canadian Coalition for Good Corporate Governance indicates that the good governance of a corporation is essential to creating long-term sustainable value and reducing investment risk. In other words, the high quality performance of board directors plays a key role in the success of a corporation. We evaluate it based

A)Corporate Governance is a structure of the company by balancing all the individual, corporation and society interest. It also helps to create relationship between company board, shareholder and stakeholder and have proper functioning of organization to prevent fraud. Board of director in the company is being appointed by the shareholder and was been audit by them if the director managing and operating the business well by reporting or having general meeting. The responsible of the board of director are achieving the company objective, provide leadership and supervising the management and reporting the shareholder about the achievement and problem. All action of the board are subject to laws, regulations and shareholder. There are various theories that underline the development of corporate governance which include Agency theory, Stakeholder theory, Stewardship theory, etc.

While shareholders’ agreements take away the directors’ discretions across a range of important matters, investors still claim to value the right to appoint a director. They actively encourage close relationships and communication between shareholders, directors and management. In fact, the size of many boards is determined by the maximum size of the shareholding that can be attracted without director representation. This frequently results in shareholdings of 5 to 7% appointing a director and, in combination with independent chairman, can produce boards of 15 or more directors.

Corporate Governance is the relationship between the shareholders, directors, and management of a company, as defined by the corporate character, bylaws, formal policies and rule laws. The corporate governance system was designed to help oversee the decisions and best interest of the shareholders. The system should works accordingly: The shareholders elect directors, who in turn hire management to make the daily executive decisions on the owner’s behalf. The company’s board of director’s position is to oversee management and ensure that the shareholders interest is being served. Corporate governance focus is with promoting enterprise, to improve efficiency, and to address disputes of interest which can force upon

Recent high-profile corporate failures, scandals and, in some cases, executive corruption, have focused international regulatory and public attention on the need for having appropriate corporate governance standards and practices. (Leblanc 2005) As such, much emphasis is being placed on board evaluation.

The control of a company is divided between two bodies: the board of directors, and the Shareholders in general meeting. In practice, the amount of power used by the board varies with the type of company. In small private companies, the directors and the shareholders are normally the same, and thus there is no division of power. In large Public Companies, the board has a tendency to to use more of a supervisory role, and individual accountability and management delegates it downward to individual executives who deals with particular

* The roles and responsibilities of the board of directors in corporate governance and the way the board affects a company’s operation.

Due to the ownership structure determines the distribution of the control rights of the company which also determines the nature of the principal-agent relationship between the owner and the operator. That’s mean the ownership structure can be determine the corporate governance structure. And the efficiency of corporate governance will finally reflect in the company operating performance.

This review intends to explain the author’s U.S. corporate governance system. Moreover, it tries to explain the system and rules for making decision of the board of directors, managers, stakeholders, and shareholders. In “A Primer on Corporate Governance”, author Cornelis A. de Kluyver, dean of the University of Oregon, provides an explanation of the American system on corporate governance. De Kluyver writes this book for students and executives who wish to enter the world of management; that includes working or dealing with a board of directions in a corporation. This book intends to expand their knowledge of management and governance. The author starts by giving a summary on the history of the U.S corporate governance system. The first part of the book shows how important it is to keep a balance of power within the corporate governance. The second part of the book focuses on the responsibilities of the board, such as selection of CEO, risk management, strategy development, unexpected events and crises. Its purpose is to inform students and future executives of the importance of corporate governance and the function of the board of directors, because it seems that most people have received little to no formal training in these subjects.

The quality of the chairman and CEO relationship can impact the happenings in the boardroom (Kakabadse et al. 2006, p.134). A positive relationship between chairman and CEO facilitates an open non-judgmental quality discussion in the boardroom (Kakabadse et al. 2006, p.141), thus improving board performance.

This study looks for evidence that the capital structure decision of firms with powerful CEOs has a negative effect of corporate performance.

Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals. Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping corporation’s performance and the way it is proceeding towards. The relationship between the owners and the managers in an organization must be healthy and there should be no conflict between the