Board Attributes and Financial Performance of Listed Firms in Uganda

Godfrey Akileng ,Eric Nzibonera ,Diana Kobumanzi

doi:10.7176/rjfa/10-14-04

Abstract

This study examines the relationship between Board of director attributes and financial performance of listed firms in Uganda. Board attributes of board size, Non-executive directors (board independence) and directors’ shareholding are examined while controlling for firm size and leverage. The study uses a cross sectional research design, employing panel data of listed firms in Uganda for a period of four years. Financial and board attributes information is collected from annual reports of each firm. The study finds that non executive director’s independence on board and large boards increase firm performance. We do not provide evidence to suggest that director’s shareholding affects firm performance differently. Thus this study is consistent with evidence that shows the importance of board of directors’ attributes on firm´s financial performance. Keywords: Board attributes, Firm performance DOI : 10.7176/RJFA/10-14-04 Publication date :July 31 st 2019

Highlights

1.0 Introduction This study examines the role of effective corporate governance on firm financial performance
Existing evidence suggests that effective boards of directors reduce agency conflict further leading to increase in firm value or firm financial performance by reducing on information asymmetry
We focus on these three board attributes because literature and the theoretical framework indicate that these are the major mechanisms that affect firm financial performance.The study looked at data for companies listed on the Uganda Securities Exchange for a period of four years (2013 2016)

Summary

Introduction

This study examines the role of effective corporate governance on firm financial performance. This study is limited to a few board of director attributes which included; independence of non-executive directors, directors’ shareholding and board size.

Objectives

Results

Conclusion