Board Composition and Firm Performance: Empirical Evidence from JSE-Listed Real Estate Firms
摘要
The study aims to investigate the relationship between board composition and the performance of JSE-listed real estate firms. It employs panel data analysis to estimate the impact of board composition elements on the performance of JSE listed real estate firms in South Africa using financial and sustainability data sourced from Bloomberg. It considered board composition elements, board size, proportions of non-executive directors, independent directors, and females on boards. Three main performances were explored: financial performance, market value, and sustainability. Return on assets and return on equity were used to measure firm financial performance while Tobin’s Q was used to measure firm value. Environmental and Social scores were used to measure firm sustainability performance. The findings indicate that female directors on boards positively and significantly impact financial and sustainability performance but not firm value. Board size was found to negatively and significantly impact financial performance but positively and insignificantly impact firm value and sustainability. The proportion of non-executive directors did not significantly impact any of the performance metrics examined. The proportion of independent directors on boards negatively impacts financial performance and positively impact sustainability. We recommend that companies emphasize the qualifications, experience, and skills that female board members bring to boards. CEOs and other corporate executives should not directly participate in the appointment of non-executive and independent board members. This would ensure that they are better able to play the monitoring role required of them. Firms should also critically consider the number of board members required for effective decision-making and monitoring.