The Effect of Board Characteristics on Financial Performance: Case of Erbil

Hawkar Anwer Hamad; Akar Omar Mhammad; Wafa Rashid Mahmood; Hero Hassan Khzir

doi:10.25212/lfu.qzj.6.4.39

Authors

Hawkar Anwer Hamad Department of Business Administration, College of Administration and Economics, Lebanese French University, Erbil, Kurdistan Region, Iraq
Akar Omar Mhammad Department of Accounting, College of Administration and Economics, Lebanese French University, Erbil, Kurdistan Region, Iraq
Wafa Rashid Mahmood Department of Accounting, College of Administration and Economics, Lebanese French University, Erbil, Kurdistan Region, Iraq
Hero Hassan Khzir Department of Accounting, College of Administration and Economics, Lebanese French University, Erbil, Kurdistan Region, Iraq

DOI:

https://doi.org/10.25212/lfu.qzj.6.4.39

Keywords:

board independence, board ownership, board meetings, financial performance, board characteristics.

Abstract

This study investigated the effect of board characteristics on financial performance. The study examined board ownership, board independence and board meetings as the independent variables of the study and Return on Assets as the dependent variable which indicated the financial performance of the organization. The data was collected from companies from different industries spanning the years 2005 to 2016 From Iraqi Securities Commission and Stock Exchange in Iraq. The study was based on a deductive approach and a panel data but cross-sectional design. The data employed the panel data and multiple regression analysis. The data employed the panel data and multiple regression analysis with the aid of Microsoft Excel and Statistical Package for Social Sciences (SPSS). The results revealed a positive relationship between board independence and board ownership with financial performance. However, increase in board meetings was found to negatively affect the company’s Return on Assets. The paper recommended that the management of listed companies maintain having more non-executive directors and independent directors with ownership as this enhanced objectivity and ensured alignment of interests between shareholders and the directors.

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