Effect of corporate governance mechanisms on corporate strategy for listed firms in Sub-Saharan Africa (SSA)

The influence of the board of corporate directors on firms’ strategies has been the subject of debate in the extant literature. Yet, empirical studies have suffered numerous deficiencies: the absence of an all-embracing theoretical outlook and dependence on proxies for the strategy role instead of a direct measure of it. This study empirically examined the influence of corporate governance mechanisms, especially board roles on the extent of corporate strategy, which are categorised into marketing efforts and capital intensity strategies. The applicable data were extracted from the annual reports of 132 non-financial publicly traded companies from Sub-Saharan Africa during 2010–2022. Using the two-step GMM estimation technique, our empirical findings revealed that board size and corporate strategy were positively correlated. Furthermore, board members’ educational background, board tenure and board members’ frequent meetings showed a positive correlation with marketing efforts strategy, whilst board gender heterogeneity recorded a positive association with capital intensity strategy. However, both board independence and the number of board subcommittees revealed a negative relationship with marketing efforts strategy. The results of the research are useful for practitioners and investors to become knowledgeable about those facets of corporate governance that contribute to higher corporate strategy outcomes.