Impact of Ownership Structure and Board Composition on Corporate Performance in Indian Companies

Abstract

This study takes into account the National Stock Exchange (NSE)-listed Indian companies, which constitute the CNX Nifty Index, for the period from 1 April 2009 to 31 March 2013. Tobin's Q, market value added, cash earnings per share and return on capital employed have been used as the corporate performance variables in the study; the first two being market-based and the last two being accounting-based measures. Board size (BS), board composition, ownership structure, multiplicity of directorship, chief executive officer (CEO) duality, CEO tenure and executive remuneration have been used as corporate governance surrogates from different dimensions along with other widely used independent variables to see their effect on corporate performance in a panel-data-based regression. BS and foreign promoters' (FPs') shareholdings have been identified to have a positive impact on more than one corporate performance variable. Among the remaining independent variables, assets turnover is positively related with the performance variables.

Corporate Governance, Firms’ Characteristics and Environmental Performance Disclosure Practices of Indian Companies

“…Recent empirical evidences like Bae et al (2018) in the context of three South Asian countries under a cross-country analysis and Haque and Ntim (2018) in the context of UK listed firms also endorse the positive association between the board size and environmental performance of firms. Besides, the findings of our study are also endorsing the view of Klein (2002) and Manna, Sahu, and Gupta (2016) that a board with large number of members is supposed to allow specialisation in direction, which in turn can lead to more effectiveness in many dimensions of a company’s performance including its market value.…”

Corporate Governance, Corporate Entrepreneurship and Firm Performance: Evidence from the Rwandese Manufacturing Industry

“…For instance, when exploring the effect of ownership structure on the firm’s performance, Kumar (2004) found that the foreign shareholding pattern did not influence significantly the firm’s performance in India. This result contrasted with other studies which found that foreign ownership lead to higher performance of firms in India (Manna, Sahu, & Gupta, 2016).…”

“…For instance, when exploring the effect of ownership structure on the firm's performance, Kumar (2004) found that the foreign shareholding pattern did not influence significantly the firm's performance in India. This result contrasted with other studies which found that foreign ownership lead to higher performance of firms in India (Manna, Sahu, & Gupta, 2016). Brown and Caylor (2009) studied the relationship between corporate governance variables and firm operating performance in USA, using a composite measure of corporate governance (governance index), and found that bettergoverned firms are relatively more profitable, more valuable and pay out more cash to their shareholders.…”

Corporate Ownership and Firm Value: A Gmm-Based Dynamic Panel Data Approach

“…Manna et al (2016),Mishra and Kapil (2017) are found to be consistent with our ndings. Regarding institutional type of ownership and rm valuation our ndings go in line with the studies ofDouma et al (2006),Ghosh (2007) in context of Indian market and McConnell and Servaes (1990) on U.S. market context, Sahuta and Gharbib (2010) in context of French rms, Ting (2013) on Taiwan market etc.…”