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The Impact of Board Composition on the Firm’s Performance in Continental Europe

Veklenko, Karina (2016) The Impact of Board Composition on the Firm’s Performance in Continental Europe.

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Abstract:The purpose of this paper is to investigate the relationship between composition of board of directors and firms’ performance. Specifically, board size and board independence were studied, expecting small and large boards as well as highly independent boards to have the greatest performance. Three performance indicators were used - return on assets (ROA), return of equity (ROE) and Tobin’s Q. The analysis found a slight indication for a U-shaped relationship between board size and ROA, and an inverted U-shaped relationship with ROE and Tobin’s Q. However, they both were statistically not significant to draw conclusions. The research confirmed the hypothesis that boards with a higher ratio of independent directors have a higher level of ROE, but the results investigating the effect on ROA and Tobin’s Q were not statistically significant.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/70171
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