How Does Board Structure Impact on Firm Performance in the UK?
Corporate Board: Role, Duties & Composition, Volume 15, Issue 2, 2019
10 Pages Posted: 13 Dec 2019
Date Written: May 6, 2019
The aim of this paper is to examine whether or not the structure of the board of directors and, in particular, board size, independence and remuneration have an impact on firm performance. The sample examined is UK FTSE 100 non-financial companies using data from the period 2012 to 2015. A regression analysis has been used concluding a significant positive correlation between board remuneration and firm performance, namely Return on Assets and Tobin’s Q. The study also concluded a positive correlation between board size and ROA, and between board independence and Tobin’s Q. Additionally, a significant negative correlation between the control variables (i.e. company size and industry) and Return on Assets.
Keywords: Corporate Governance Code (CGC), Board Structure, Board Size, Board Independence, Board Remuneration, Return on Assets (ROA), Tobin’s Q (TQ), UK
JEL Classification: G38, G21, L25, J53
Suggested Citation: Suggested Citation