The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan
International Journal of Accounting, Finance and Risk Management
Volume 3, Issue 3, September 2018, Pages: 16-20
Received: Sep. 16, 2018;
Accepted: Oct. 12, 2018;
Published: Nov. 7, 2018
Views 112 Downloads 6
Almontaser Abdallah Mohammad Qadorah, Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, Sintok, Malaysia
Faudziah Hanim Bt Fadzil, Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, Sintok, Malaysia
Previous studies that dealt with corporate governance have witnessed gradually significant growth that created some new trends. This paper aims to be involved in such trends through examining the link between board size and CEO duality as one of the important corporate governance mechanisms and firm performance in Jordan as one of emerging economies. The current study used the multiple regression method to analyze available data for a sample of 64 industrial firms listed in the Amman Stock Exchange (ASE) for the fiscal year 2013. The findings revealed that board size has a positive impact on performance. On the other hand, the findings surprisingly showed evidence to support the impact of CEO duality on performance. The practical implications of the current study demonstrated that good corporate governance is imperative to all organizations and must be encouraged for the interest of all stakeholders. Same as the majority of the previous studies, the current study expectedly found that CEO duality is significantly contributing to the firm performance. In that, this study is the first study in emerging economies to investigate such a link. Such new insights on this relationship by current study provide helpful information that is of great value to the government, academics, policy makers, and other stakeholders.
Almontaser Abdallah Mohammad Qadorah,
Faudziah Hanim Bt Fadzil,
The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan, International Journal of Accounting, Finance and Risk Management.
Vol. 3, No. 3,
2018, pp. 16-20.
Alkhatib, K., & Eqab Al Bzour, A. (2011). Predicting corporate bankruptcy of Jordanianlisted companies: Using Altman and Kida models. International Journal of Business and Management, 6(3), p 208.
Abdullatif, M., & Al-Khadash, H. A. (2010). Putting audit approaches in context: the case of business risk audits in Jordan. International Journal of Auditing, 14(1), 1-24.
Ajeela E., & Hamdan A. (2011). The relationship between corporate governance and earnings management: Evidence from Jordan. Arab Journal of Administrative Sciences, 17(2), 1-28.
Jensen, M., & Meckling, W. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Financial Economics, 3(4), 305-360.
Kyereboah-Coleman, A., & Biekpe, N. (2005). The relationship between board size, board composition CEO duality and firm performance experience from Ghana. Working paper.
Dalton, C. & Dalton, D. (2005). Boards of directors: Utilizing empirical evidence in developing practical prescriptions. British Journal of management, 16(1), 91-97.
Jensen, M. (1993). Modem industrial revolution, exit, and the failure of internal control systems. Journal of Finance, 3(4), 831-80.
Salihi, A. A. (2015). The effect of board the size and audit committee the size on earnings management in Nigerian consumer industries companies. International Journal of Innovative Research and Development|| ISSN 2278–0211, 4(3).
Nath, S. D., Islam, S., & Saha, A. K. (2015). Corporate Board Structure and Firm Performance: The Context of Pharmaceutical Industry in Bangladesh. International Journal of Economics and Finance, 7(7), 106.
Gill, A., & Mathur, N. (2011).Board size, CEO duality, and the value of Canadian Manufacturing firms. Journal of Applied Finance and Banking, 1(3), 1-13.
Kouki, M., & Guizani, M. (2015). Outside directors and firm performance: The moderating effects of ownership and board leadership structure. International Business Research, 8(6), 104.
Conyon, M. J. (2014). Executive compensation and board governance in US firms. The Economic Journal, 24(574), F60-F89.
Kumar, N., & Singh, J. P. (2013). Effect of board size and promoter ownership on firm value: some empirical findings from India. Corporate Governance: The international journal of business in society, 13(1), 88-98.
Yusoff, W. F. W., &Alhaji, I. A. (2012). Corporate governance and firm performance of listed companies in Malaysia. rends and Development in Management Studies, (1), 43-65.
Liao, L. K. C., Mukherjee, T., & Wang, W. (2015). Corporate governance and capital structure dynamics: An empirical study. Journal of Financial Research, 38(2), 169-192.
Kalsie, D., & Mittal Shrivastav, S. (2016). The Relationship between CEO Duality and Firm Performance: An Analysis Using Panel Data Approach.
Jackling, B., & Johl. S. (2009). Board Structure and Firm Performance: Evidence from India’s Top Companies. Journal of Corporate Governance: An International Review, 17(4): 492-509.
Ujunwa, A., Salami, P. O., & Umar, A. H. (2013, January). CEO Duality and Firm Performance: An Integration of Institutional Perceptive with Agency Theory. In Proceedings of World Academy of Science, Engineering and Technology (No. 73, p. 860). World Academy of Science, Engineering and Technology (WASET).
Fooladi, M. (2012) Board characteristics and firm performance, Journal of Modern Accounting and Auditing, 8(5):688-694.
Fauzi, F., & Locke, S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms.
Nodeh, F. M., Anuar, M. A., Ramakrishnan, S., & Raftnia, A. A. (2016). The Effect of Board Structure on Banks Financial Performance by Moderating Firm Size. Mediterranean Journal of Social Sciences, 7(1), 258.
Schmid, M., Zimmerman, H. (2007), Should chairman and CEO be separated? leadership structure and firm perform Switzerland. Working paper, from http://papers.ssrn.com/sol3/papers.cfmabstract_id=696381.
Saeed, M. B., Murtaza, Z., & Sohail, I. (2013). Corporate Governance and Firm Performance: A Study on Moderating Effects of Firm Size and Leverage on the Relationship between Corporate Governance and Firm Performance in Banking Sector of Pakistan.