Impact of the Board Structure on Financial Performance by Stewardship Theory Perspective

The impact of the financial performance of the board structure is the focus of attention for many researchers. In the studies conducted in Turkey, the relationship between board structure and performance is mostly explained by agency theory perspective. In order to offer a different perspective from the literature, this study examines impact of the board structure on financial performance by agency theory perspective. At the same time, considering the context of Turkey ranked among developing countries, the question " either stewardship theory or agency theory explains board structure better" is meant to be answered. To achieve this goal, the research hypotheses developed from stewardship theory perspective in the light of secondary data obtained from 236 firms listed in the Public Disclosure Platform, a set of control variables taken into account, were tested with hierarchical regression analysis. Control variables are composed of firm size, sector, the share of the company's CEO, the share of insider director in the company except the CEO, proportion of female members and proportion of the same surname members in the board, the share of the largest shareholder in the company, the share of institutional investors and firm age. As a company performance indicators (ROA-Return on assets, ROE-Return on equity and ROS-Return on sales) three variables were used. The independent variables of the study is composed of proportion of inside director, CEO duality, board size, average age and average tenure. After the analysis, it was found assumptions of the agency theory more descriptive than stewardship theory for Turkey.