The Effect of Board Structure on Banks Financial Performance by Moderating Firm Size

Nodeh, Fazel Mohammadi; Anuar, Melati Ahmad; Ramakrishnan, Suresh; Raftnia, Ali Akbar

doi:10.5901/mjss.2016.v7n1p258

Cited by 14 publications

(15 citation statements)

References 33 publications

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“…The output indicates mixed results between the BOD characteristics and firm financial performance (ROA) where the BOD size on this occasion has a positive impact on firm financial performance (ROA). This outcome is similar as what has been found in other studies like [20,21].…”

Section: Roa = α0 + β1size + β2ceo + εsupporting

confidence: 93%

The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan

Qadorah¹,

Fadzil²

2018

IJAFRM

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This study investigates the relationship between board of directors' characteristics namely (board size and CEO duality) and firm performance among Jordanian listed firms. Firm performance is measured using return on assets (ROA). Due to limited studies regarding corporate governance practices and firm performance has been done in developing countries like Jordan. Importantly, these studies have also been limited in their scope due to restricted and particularized focus on factors hindering firm performance in the industrial sector of Jordan. This study covers industrial listed firms on the Amman Stock Exchange, Jordan for the year 2013 as a sample. Multiple regression analysis is used to test the hypotheses and to examine the relationship between board of directors' characteristics namely (board size and CEO duality) and firm performance. The findings showed that board size is significantly and positively related to ROA. On the other hand, CEO duality is significantly and negatively related to ROA. These results indicate that corporate governance plays a vital role in enhancing firm performance and reducing agency conflict. Further, regulator bodies in Jordan should increase the effectiveness of corporate governance in industrial Jordanian firms in order to enhance the quality of financial reports. In addition, this study opens up avenues for more studies on firm performance not only in Jordan, but also in other countries where this area of study is lacking.

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Section: Roa = α0 + β1size + β2ceo + εsupporting

confidence: 93%

The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan

Qadorah¹,

Fadzil²

2018

IJAFRM

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“…It is henceforth of prime importance for banking institutions to mold their strategic resolutions while giving more attention to risk-return preferences controlled by bank size. Nodeh et al (2015) found that the size of banks had a moderating impact that was positive on the relationship between the determinants of structures of board and firms' financial performance depicting a consistent finding with the current study. Hanafi Tumin and Mohd Said (2010) deductions from the study indicated that size and level of liquidity in banks don't bear any influence that is significant on how banks perform in the two countries, which was contradictory with the findings depicted in the current study.…”

Section: Table 9 -Sargan Test For the Modelsupporting

confidence: 91%

“…In general terms, the relationship that exists between bank size of commercial banks and their performance is considered to be positive (Kiyota, 2011;Nodeh et al, 2015). However, several research studies have implicated bank size impact to be non-linear, with profitability increasing with commercial bank size and shrinking as a result of bureaucratic factors, among other reasons (Hanafi Tumin & Mohd Said, 2010).…”

Section: Table 9 -Sargan Test For the Modelmentioning

confidence: 99%

Do Bank Size Moderate Relationship between Banks’ Portfolio Diversification and Financial Performance of Commercial Banks in Kenya?

Ngware

Olweny

Muturi

2020

SJOM

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Purpose- It is complicated to efficiently manage the bank’s portfolio, simultaneously maximize returns and minimize risks while being subject to managerial and regulatory constraints. In the financial industry, the size of a bank is used to assist in capturing economies as well as diseconomies of scale. Design/Methodology- As in cases of most literature from finance, natural logarithms of banks' total assets were made use of to measure commercial banks’ size. The 43 commercial banking institutions having an official license from CBK by December 2017 were the target population of this study. The study analyzed Time-Series Cross-Sectional unbalanced secondary panel data obtained from all the 43 commercial banking institutions in Kenya for fifteen years ranging from 2003 to 2017. Findings- Study findings revealed a positive effect of bank size on ROE and ROA that was significant. Correlation analysis revealed a positive association of bank size on the financial performance of banks in Kenya, which was significant. Bank size had a significant moderating effect on the relationship of banks portfolio diversification and financial performance of banks in Kenya. Practical Implications- The findings on bank size insinuated that a higher size of entire asset of banks is most probable to accelerate the bank to diversify into feasible opportunities on investment, traverse more enhanced lines of business, increase capacity in market power and, produce increased value that boosts the firm to profit from economies of scale and wider scope and henceforth superior and increased financial performance.

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“…The positive effect outcomes indicated by board with more nonexecutive directors agree with the positive impact documented by Nwaubani (2019), Atuahene (2016), Dauda and Hawa (2016), Nodeh, Anuar, Suresh andRaftnia (2016, Hassan andFarouk (2014) but contradict the negative effect reported in Yilmaz and Buyuklu (2016), John (2015) and Olatunji and Ojeka (2011).…”

Section: Discussion Of Findingssupporting

confidence: 63%

“…The study recommended that the board size should be limited to a sizeable number and the audit committee be composed of mainly directors with adequate skills, and who are familiar with the banking terrain. Nodeh, Anuar, Suresh and Raftnia (2016) evaluated the role of bank size as moderator on relationship between board independence and board size with banks financial performance using the data of 37 Malaysian banks. The results revealed that board independence and board size have positive impact on firm financial performance.…”

Section: Journal Of Public Management Researchmentioning

confidence: 99%

The Critical Mass Question, Women Directors and Performance of Banks in Sub Saharan Africa

Nwaubani¹,

Orikara²

2019

JPMR

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This study mainly evaluated the effect of Board composition on the performance of deposit money banks (DMBs) in Sub Saharan Africa (SSA) with special focus on the critical mass question. Specific objectives are determination of the effect of women directors and board composed of more non-executive directors on return on assets (ROA) and net interest margin (NIM) of the banks. Secondary data on six SSA countries and twelve banks collected for the period 2004 to 2016 were used. Panel data regression approach was employed with model selection subjected to Hausman tests. The study revealed among others that board with more nonexecutive directors has significant positive effect on ROA and NIM with significant positive relationship with ROA and NIM. Women directors have very negligible effect on performance of the DMBs while correlating negatively and insignificantly with ROA and NIM. It is therefore, concluded that though, nonexecutive directors have strong positive significant effect on performance of deposit money banks in Sub Saharan Africa and women directors indicate very negligible effect, the conflicts over the effect of the two variables are not yet fully resolved. It is recommended that DMBs should make room for at least three female directors in their boards while adoption and enforcement of gender quota by countries should be considered.

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The Effect of Board Structure on Banks Financial Performance by Moderating Firm Size

Abstract: Abstract

Cited by 14 publications

References 33 publications

The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan

The Relationship Between Board Size and CEO Duality and Firm Performance: Evidence from Jordan

Do Bank Size Moderate Relationship between Banks’ Portfolio Diversification and Financial Performance of Commercial Banks in Kenya?

The Critical Mass Question, Women Directors and Performance of Banks in Sub Saharan Africa

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