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Effects of Board Size and Board Composition on Firms' Financial Performance in Saudi Arabia |
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| รหัสดีโอไอ | |
| Creator | Azzam Ibarhim Alhejji, Arsalan Tauqir Khawaja |
| Title | Effects of Board Size and Board Composition on Firms' Financial Performance in Saudi Arabia |
| Contributor | - |
| Publisher | TuEngr Group |
| Publication Year | 2564 |
| Journal Title | International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies |
| Journal Vol. | 12 |
| Journal No. | 12 |
| Page no. | 12A12T: 1-11 |
| Keyword | Corporate Governance, Agency Theory, Stewardship Theory, Non-Executive Directors, Financial Performance, Stakeholder Theory, Board's Size, Non-Executive Director, return on assets (ROA) and earnings per share (EPS). |
| URL Website | http://TuEngr.com/Vol12_12.html |
| Website title | ITJEMAST V12(12) 2021 @ TuEngr.com |
| ISSN | 2228-9860 |
| Abstract | This paper investigates the impact of board structure on the firms' performance in Saudi Arabia. The variables which measure the corporate governance structure are the board composition, and board size using regression-based analysis. The sample of study covered all listed firms in Tadawul i.e., 159 firms listed in the Saudi Stock Exchange. This study's findings demonstrate that non-executive directors have a positive effect on all measurements of financial performance, indicating that the higher the percentage of non-executive directors, the more improved the process of independent decision-making is, which overflows into the firm's performance overall. This shows that higher numbers of non-executive board members resulted in improved and more effective decision making, thus impacting positively on the performance of the board and thus, overall company performance also. These findings are in line with agency theory. Moreover, these results complement agency theory. Lastly, the size of the board was identified to have a positive and significant impact on the performance of the company. |
