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Board of directors and financial performance in the Middle East

Author

Listed:
  • Charbel Salloum
  • Elie Bouri
  • Christophe Schmitt

Abstract

This study seeks to trace dimensions through which corporate governance characteristics influence the financial performance of family owned businesses. Between the periods of 2009-2011, we examined 160 Lebanese family owned firms that were equally divided between a control and an experimental group. Using a multiple logistic regression between a proxy ratio of financial distress and three exogenous variables of corporate governance, we found evidence of the attribute of boards' composition to firm's failure; the presence of outside directors seemed to have no role in the financial distress and insider ownership decrease the likelihood of financial distress but CEO duality increases the same probability of family owned firms in Lebanon. Our findings may well urge Lebanese investors and regulators toward the implementation of governance practices, to enhance the performance in one of the pillars of every local economy.

Suggested Citation

  • Charbel Salloum & Elie Bouri & Christophe Schmitt, 2013. "Board of directors and financial performance in the Middle East," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 14(3), pages 274-292.
    • Handle: RePEc:ids:ijbpma:v:14:y:2013:i:3:p:274-292
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    Citations

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    Cited by:

    1. Sattar Khan & Yasir Kamal & Muhammad Abbas & Shahid Hussain, 2022. "Board of directors and earnings manipulation: evidence from regulatory change," Future Business Journal, Springer, vol. 8(1), pages 1-22, December.
    2. Nehme Azoury & Elie Bouri, 2015. "Principal–principal conflicts in Lebanese unlisted family firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(2), pages 461-493, May.
    3. Samara, Georges, 2021. "Family businesses in the Arab Middle East: What do we know and where should we go?," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    4. Bodolica, Virginia & Spraggon, Martin & Zaidi, Sahar, 2015. "Boundary management strategies for governing family firms: A UAE-based case study," Journal of Business Research, Elsevier, vol. 68(3), pages 684-693.
    5. Narayan, Shivani & Kumar, Dilip & Bouri, Elie, 2023. "Systemically important financial institutions and drivers of systemic risk: Evidence from India," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).

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