The Effect of Board of Directors Characteristics on the Financial Performance of Jordanian Industrial Listed Companies: An Empirical Study
摘要
This research examines impact of the board characteristics on the financial performance of the industrial listed firms in Jordan. Our study employs a purposive sample of 28 firms for the years 2018–2022 to analyze the relationship between board of directors’ characteristics and firm performance appraised by the Return on Assets (ROA), Return on Equity (ROE), and Tobin’s Q while incorporating panel data regression analyses. The results show that the board size has a significant and negative impact on ROA, meaning that smaller boards could be optimal for Jordanian firms. Both meeting frequency and board independence have positive effects on ROA and ROE of the firms further confirming the notion that the more frequent meetings and a greater number of independent directors are beneficial for firms. Besides, there is a positive impact of the number of directorates with higher Education qualification on both ROA and ROE meaning that education of directors directly influences the performance of the board. The results of this research will be useful to the policymakers, regulators, and corporate management of Jordan and other emerging markets concerning enhancing corporate governance. It extends the current research on how the internationalization of boards might enhance the functioning of enterprises in emerging economies, and as well highlights the contextual elements that should be taken into consideration in future corporate governance studies.