Board composition, board leadership structure and firm performance: evidence from Bangladesh

Rashid, Afzalur (2009) Board composition, board leadership structure and firm performance: evidence from Bangladesh. In: 2009 Accounting & Finance Association of Australia and New Zealand Conference (AFAANZ 2009), 5-7 July 2010, Adelaide, Australia.

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Abstract

This study examines if the corporate board composition in the form of representation of outside independent directors and structural independence of the board influence the firm economic performance in Bangladesh. By using 2-stage least square regression (2SLS) analysis, it is found that neither the board composition, nor the CEO-duality influence the firm performance. The finding of this study does not capture the agency theory for board composition, implying that the outside independent directors are not good for firm performance in Bangladesh. However, it supports the agency theory for board leadership structure. The outside directors can not add any value as they do not have any supervisory position in the board; they may have a close relationship with inside board members; many of them may not have adequate qualification and expertise of the independent directors. Similarly, the CEO duality may have reduced the board’s ability to exercise the governance function in the context of Bangladesh. Therefore, without legislative requirement of having the adequate qualification and expertise of the independent directors and without restructuring the board, the board independence may not provide any beneficial outcome to the firms.


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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: No evidence of copyright restrictions.
Depositing User: Dr Afzalur Rashid
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 13 Nov 2011 08:47
Last Modified: 03 Jul 2013 00:07
Uncontrolled Keywords: agency theory; Bangladesh; board composition; board leadership; CEO; stewardship theory
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement
17 Psychology and Cognitive Sciences > 1701 Psychology > 170107 Industrial and Organisational Psychology
14 Economics > 1402 Applied Economics > 140207 Financial Economics
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9104 Management and Productivity > 910402 Management
URI: http://eprints.usq.edu.au/id/eprint/9118

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