The relationship between broad characteristics and firm performance : A study of non-financial listed company in Vietnam stock market
Abstract
The objective of this thesis was to establish the relationship between Board of Director‟s Characteristics and Firm performance of public listed companies using a sample of 135 listed companies in Ho Chi Minh stock market ( HOSE )
Based on the Literature Review, I develope a conceptual framework to examine the relationship between certain board characteristics and firm performance measure by three different measures namely return on asset (ROA), return on equity (ROE) and market-to- book value ratio . Board of director‟s characteristics considered in this research include board size, board composition, director ownership and CEO duality. The Ordinary Least Square (OLS) regression was used to estimate the relationship between firm performance measures and independent variable
Findings from the study show that there is no relationship between the number of directors in a board size and board composition and firm performance. However, a mixed result was observed between director‟s shareholding and firm performance measures. Director ownership has negative impact on firm performance measured by ROA and ROE but positive impact when using Market-to-Book value as indicator for firm performance. CEO duality is also found negative associated to firm performance measured by Market-to-Book value.
This studies helps the shareholders, stakeholders, management and potential investor
of the public listed company to understand the selected board characteristics deeply. Besides, when the impact of board characteristics on firm performance is known, agency problem is able to rudece by more effective board of director‟ s appointment. Hence, the level of corporate governance of the companies is able to be enhanced and lead to better
firm performance.