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

See all articles by Dr. Ahmad Alqatan

Dr. Ahmad Alqatan

Portsmouth Business school

Imad Chbib

affiliation not provided to SSRN

Khaled Hussainey

University of Plymouth - Plymouth Business School

Date Written: May 6, 2019

Abstract

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

Alqatan, Ahmad and Chbib, Imad and Hussainey, Khaled, How Does Board Structure Impact on Firm Performance in the UK? (May 6, 2019). Corporate Board: Role, Duties & Composition, Volume 15, Issue 2, 2019 , Available at SSRN: https://ssrn.com/abstract=3501960

Ahmad Alqatan (Contact Author)

Portsmouth Business school ( email )

Portsmouth, PO1 3DE
United Kingdom

Imad Chbib

affiliation not provided to SSRN

Khaled Hussainey

University of Plymouth - Plymouth Business School ( email )

Mast House
Plymouth, Devon PL4 8AA
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
785
Abstract Views
1,723
Rank
48,478
PlumX Metrics