Board size and corporate financial performance: An investigation

Abstract

This paper examines the association between board size and corporate financial performance using data on 504 corporations belonging to 18 industries. The results suggest that the size of the board plays an important role in influencing the financial performance of corporations. The analysis shows that the performance improves if the board size increases, but the contribution of an additional board member decreases as the size of the corporation increases. The results, however, fail to indicate any significant role of directors’ equity ownership in influencing the performance.