Abstract:
This study examines the effect of board composition on performance of listed
firms in Ghana. It employed the explanatory research design. Criterion-based
sampling technique was used to select eight (8) financial listed firms and
twenty-two (22) non-financial listed firms in Ghana. Published annual reports
of listed firms were the main secondary source of data for this study. The
study specifically examined the impact of board size on performance of firms.
It also ascertained the effect of gender diversity on performance of firms. It
finally evaluated the effect of board independence on performance of firms
listed on Ghana Stock Exchange using ROA, ROE and SMR as the measures
of performance for the financial and non-financial listed firms. Using panel
regression model, the study found that board size has positive influence on
operational or accounting performance of the financial listed firms but has no
influence on their stock market performance. It also indicates that both
accounting and market performance of non-financial listed firms are not
affected by the board size. It also found that board gender diversity has no
influence on the performance of both financial and non-financial listed firms
in Ghana. The study finally revealed that board independence has significant
positive effect on accounting performance of both financial and non-financial
listed firms but has no significant influence on stock market performance of
both groups of firms in Ghana. The study recommends that shareholders and
other stakeholders in the financial sector should consider having relatively
large board size for effective monitoring of management’s activities.
Stakeholders should ensure that boards of listed firms have high proportion of
outside directors to improve performance in their operations
