The effect of board's attributes on firm performance: Case in Ho Chi Minh Stock Exchange (HOSE)

Abstract

The main purpose of this study is to investigate the relationship between Board’s Attributes and Firm Performance, which the data is collected from 158 companies in HoChiMinh Stock Exchange in 2013. In addition, using this sample, the moderating effect of foreign ownership to the association of Board’s attributes and Firm performance is also being examined. Based on the literature review, four board’s attributes are Board size, Board composition, CEO Duality and Board ownership; the firm performance is measured by the Return on Equity (ROE). Although the results can’t establish the relationship between these attributes, they also bring some suggestions. To improve the performance, firms should increase the number of members in boards and maintain at least one-third of total members is the independent non-executive directors. Moreover, giving a person holding the position of CEO and Chairman, or reduce the ownership of directors also bring a better firm performance. Finally, foreign ownership seems to have no impact on the relationship between board’s attributes and firm performance. In conclusion, the research still exist some shortcoming and limitation in practice, which will need to be improved. The conclusion and recommendation are provided to help the shareholders, management, investors and researchers have a clearer picture, and perform effectively.