Abstract
The study empirically examines the influence of board characteristics variables on firms' financial performance of S&P BSE Sensex (an index comprising 30 companies drawn from different sectors) companies during the period 2004-2014. For measuring firms' performance, two variables, namely - return on assets (RoA) which is an accounting-based measure, and Tobin's Q which is a market-based measure, were considered as separate independent variables. Four independent variables viz., board composition (BC), board ownership (BO), board size (BS) and CEO duality (CEOD) were selected for the study. Using the accounting-based measure, the study finds that there is significant negative association between BS and BO with regard to the firms' performance, thereby concluding that a smaller board size and a small ownership of executive and non-executive directors in the equity leads to improved financial performance. The study also finds no evidence of association between the independent variables and the market-based measure, Tobin's Q.
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