Board Membership Changes And Financial Performance: The Moderating Role Of Family Firms

Abstract

The aim of this study is to examine a possible relationship of corporate financial performance and board membership changes. As a consequence, whether too little or too much board membership changes would produce a detrimental impact to financial performance. Furthermore, this study investigated whether this effect is more pronounced in family firms over non-family firms. Based on the agency theory and stewardship perspective, the results indicate that board membership changes are significant for family firms towards short-term financial performance indicators, with positive effect above a certain interval, though it signaling to the market may not be relevant. Also provides insightful examination of a specific corporate governance issue that is valuable both for academics and practitioners.