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Exploring the Role of Board Characteristics on Enhancing Financial Performance of Jordanian Listed Companies

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  • Laith A. Alaryan

Abstract

Corporate governance considered important topic at the local and international levels, especially after many financial crises and corporate failures and such as Enron and World Com This paper aims to explore the role of board characteristics, (i.e. board size, board composition and board leadership structure) on enhancing firms¡¯ financial performance; this study used the non-financial companies¡¯ annual reports for 6 years (2011-2016) to extract the needed information. The non- financial sector consisted form 167 companies, only 139 companies are included in this study due the lack of data during study¡¯s period. The results revealed that there is a positive role for board composition, board leadership structure, board size, on enhancing financial performance, while there is no significant role for board tenure, on financial performance. These mixed results on the relationship between board characteristics and financial performance have opened up possible research area in the future. For instance, extending the sample to comprise more sectors from Amman Stock Exchange is worthwhile to further support or refute the results of this study.

Suggested Citation

  • Laith A. Alaryan, 2017. "Exploring the Role of Board Characteristics on Enhancing Financial Performance of Jordanian Listed Companies," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(7), pages 99-105, July.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:7:p:99-105
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    References listed on IDEAS

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    1. Leftwich, Rw & Watts, Rl & Zimmerman, Jl, 1981. "Voluntary Corporate Disclosure - The Case Of Interim Reporting," Journal of Accounting Research, Wiley Blackwell, vol. 19, pages 50-77.
    2. Yahya Ali Al-Matari & Abdullah Kaid Al-Swidi & Faudziah Hanim Bt Fadzil & Ebrahim Mohammed Al-Matari, 2012. "Board of Directors, Audit Committee Characteristics and Performance of Saudi Arabia Listed Companies," International Review of Management and Marketing, Econjournals, vol. 2(4), pages 241-251.
    3. Eric M. Bosire & Vincent O. Ongore, 2015. "Effects of Board Composition on Financial Performance: Empirical Analysis of Companies Listed at the Nairobi Securities Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 23-43.
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    Cited by:

    1. Doğan Berna & Ekşi İbrahim Halil, 2020. "The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey," Economics and Business Review, Sciendo, vol. 6(3), pages 88-104, August.

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    More about this item

    Keywords

    financial performance; board size; board composition and board leadership structure;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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