A Study of the Correlation between Board of Directors' Human and Social Capital and Corporate Financial Performance
Subject Areas : Ethics and accounting
Ali
Nazari Abarbekouh
1
(Master's degree, Department of Accounting, Faculty of Humanities, Shahr Ray Branch, Islamic Azad University, Tehran, Iran)
Midya
Azizi
2
(Master's degree, Department of Accounting, Firuzkoh Branch, Islamic Azad University, Firozkoh, Iran)
Keywords: Return on Assets (ROA), Corporate Financial Performance, Social capital, Board of Directors, Human Capital, Tobin's Q Ratio,
Abstract :
Purpose: The purpose of the present study is to review the correlation between board of directors' human social capital and corporate financial performance.Method: To conduct this research, 163 corporations accepted in Tehran Stock Exchange during 2016-2021 were chosen. Human capital is composed of 4 aspects including education, expertise, experience (in industry), and credit of board of directors while social capital consists of two internal and external segments. Financial performance was measured through 2 criterions of return on assets and Tobin's Q ratio and then the hypotheses were tested using multivariate regression and generalized least squares.Findings: There is a significantly positive relation between the number of experts in board of directors and return on assets whereas the number of experts in board of directors, the number of experienced members (in industry), and external/internal social capital have a significantly positive relation with Tobin's Q ratio.Conclusion: Hiring board of directors with higher human and social capital can improve the corporate value that is useful for the maximization of stockholders' wealth.
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