The Role of Board of Director Composition as a Corporate Governance Index in Iranian Firm Performance

Subject Areas : Management Accounting

Bita  Mashayekhi ¹ (نویسنده اول و مسئول مکاتبات.)
Behnam  Tootakhan Bonab ² (ندارد)

Received: 2009-04-14 Accepted : 2009-05-17 Published : 2009-03-21

Keywords: Corporate Governance, Boards of Director Composition, Outside Directors, Leadership Structure,

Abstract :

This research investigates the role of some corporate governance indices on firmperformance in Iranian Firm. In this paper, we use board independence and boardleadership as corporate governance indices and ROA, ROE, and EPS as firmperformance surrogates. Data from Tehran Stock Exchange (TSE) companies for the2002-2006 financial years were used to test this hypothesis. We find no relationbetween leadership structure and Iranian firms’ performance. Likewise, boardindependence does not promote Iranian firms’ performance. Besides, both leadershipstructure and board independence together do not impact the performance of Iranianfirms. Our examinations show the duality problem in 76 percent of sample firms.And, about 60 percent of directors on the board are non-executive.