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

Year 2011, Volume: 2011 Issue: 1, 1 - 21, 01.06.2011

S. Ahmet Menteş

Abstract

The paper investigates the relationship between board size and firm performance in Istanbul Stock Exchange (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 (ROA), which is an earnings based performance measure. The second performance measure is Economic Value Added (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 (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

References

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