Board of Directors' Size and Firm Performance: Evidence from Non-Financial French Firms Listed on CAC 40

Abstract

The study aims to investigate the relationship between board size and firm's performance for a sample of non-financial French firms listed on the CAC 40 between 2005 and 2017. We estimated the firm's performance using two types of metrics, the accounting-based measures (ROA and ROE) and the market-based measures (Tobin Q and MTB). By applying the panel data regressions (fixed-effects and random-effects), the findings show that there is a positive effect of board size on firm performance. In addition, our results show that the optimal number of the board size should be between 13 and 17 members in order to achieve good performance for non-financial French firms.