Abstract
This research investigates the effect of corporate governance factors, including board size and multiple directorships, on firms' financial performance. Utilizing agency and stakeholder theories as its basis for analysis, this investigation seeks to understand board size's effect on decision-making efficiency as well as organizational efficiency. Additionally, this study investigates how interlocked directorships affect firm performance. Studies examining existing literature reveal mixed findings regarding the correlation between board size and financial performance, with some studies finding positive effects while others showing adverse results. Furthermore, the busyness hypothesis states that multiple directorships may hinder firm performance due to reduced management supervision and higher agency costs. This paper contributes significantly towards the understanding of corporate governance's influence on firm performance by offering insight into this complex relationship while serving as a basis for further study in this area.
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