Abstract:
This paper provides investigation on the effects of board size and intensity of board
activity on the financial performance of small and medium scale enterprises. It further examines the
mediating effects of access to capital and firms’ reputation on these relationships. This cross sectional
study considered primary data from 423 small and medium sized enterprises (SMEs) within the Accra
Metropolis of Ghana using structured questionnaires. Standard regression and Baron and Kenny’s
(1986) pattern of mediation analysis were employed to analyze the data. The results of the study
revealed that board size had a positive relationship with financial performance while intensity of
board activity did not. In addition, access to capital and firm reputation mediated the nexus between
board size and financial performance. Since the relationship between intensity of board activity and
financial performance was insignificant, access to capital and firm reputation did not mediate this
relationship. It is recommended that SMEs should expand their board sizes and reduce the number of
board meetings. Finally, the Government should provide guarantees to facilitate SMEs’ access to
financing from traditional banks. This would lead to the creation of more jobs and overall national
development.
