Abstract
The Board of Directors (BoD) as an internal mechanism of corporate governance is considered to be a very important means of control. Indeed, according to several studies, its effectiveness depends on several factors relating to BoD size, the independence of its members, the presence of an audit committee, gender diversity and BoD meetings. To see the influence of independent variables on the dependent variable financial performance (Return on Equity _ROE), we used econometric tests. After the pre-requisite tests, we adopted the random effects model, which was validated through testing. Our empirical validation was conducted on a sample of 30 Senegalese public utility companies over a period of 8 years (2004-2011). The results of the model show that at the 5% threshold, hypotheses H.1, H.2 and H.4 are rejected. On the other hand, H.3 is validated. H.5 was not tested because the audit committee variable was an exception. Our results gave sufficient information to the Senegalese authorities to make good decisions. Key words: Board of Directors (BoD), financial performance, panel data, modeling.
Highlights
Since the appearance of the first reports of good practices and due to the bankruptcy of large companies (Enron, 2001; Worldcom, 2002) and the financial crisis of 2008 and its consequences, the last decade has consecrated the notion of corporate governance by placing it at the center of debates
All companies have complied with OHADA and Senegalese laws, Law 90-07 of 26 June 1990 and the law on parity, which do not take this issue into account. (iv) The presence of independent directors on the Board of Directors (BoD) has been almost non-existent
The real challenge in the study of panel data lies in modeling individual heterogeneity, without neglecting the temporal dimension
Summary
Since the appearance of the first reports of good practices and due to the bankruptcy of large companies (Enron, 2001; Worldcom, 2002) and the financial crisis of 2008 and its consequences, the last decade has consecrated the notion of corporate governance by placing it at the center of debates. These scandals have certainly affected Northern countries, and have repercussions in developing countries. The governance code was drawn up by the Institut Sénégalais des Administrateurs in 2008
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