An Analysis on Relationship Between Board Size and Firm Performance for Istanbul Stock Exchange (ISE) National Manufacturing Index Firms

Authors : S Ahmet MENTEŞ

Pages : 1-21

View : 19 | Download : 10

Publication Date : 2011-06-01

Article Type : Research Paper

Abstract :The paper investigates the relationship between board size and firm performance in Istanbul Stock Exchange insert ignore into journalissuearticles values(ISE); National Manufacturing Index firms for the period of 2004-2009. The Board of Directors is a vital internal mechanism of corporate governance and plays a crucial role in the management of the firm. Specific board features, like board size, and its‟ impact on firm performance have been extensively studied. This study employs two performance measures; one of them is Return on Assets insert ignore into journalissuearticles values(ROA);, which is an earnings based performance measure. The second performance measure is Economic Value Added insert ignore into journalissuearticles values(EVA);, which is a value based performance measure. The study exhibits that the relationship between board size and EVA is insignificant but there is a positive significant relationship between board size and Return on Assets insert ignore into journalissuearticles values(ROA);. The study concludes by discussing the possible reasons for the findings and proposes recommendations for future studies on the topic.
Keywords : Corporate Governance, Board Size, Performance, Economic Value Added