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Board Composition and Financial Performance

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  • Chanchal Chatterjee
  • Tirthankar Nag

Abstract

The present article makes an attempt to empirically examine the linkage between board composition and financial performance of the listed Indian and Chinse firms spanning over the period from 2010 to 2014. Board composition comprises of the four variables, namely, board size, auditors’ quality, CEO duality and proportion of independent directors on the board. The study finds that for Indian firms, the separation between the chief executive officer (CEO) and the chairperson does have positive impact on the firms’ return on equity (ROE), while for the Chinese firms, the proportion of independent directors on the board does significantly influence ROE of the firms. Firms with higher proportion of independent directors on their boards experience greater ROE. However, auditors’ quality and board size are not found to have any impact on the ROE of the firms of either country.

Suggested Citation

  • Chanchal Chatterjee & Tirthankar Nag, 2015. "Board Composition and Financial Performance," South Asian Survey, , vol. 22(2), pages 127-135, September.
    • Handle: RePEc:sae:soasur:v:22:y:2015:i:2:p:127-135
    DOI: 10.1177/0971523117753435
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