Independent Directors, Board Leadership Structure and Corporate Financial Performance: Evidence from Jordan

Dea’A Al-Deen Omar Al-Sraheen

doi:10.6007/ijarafms/v10-i3/7852

Abstract

Independent Directors, Board Leadership Structure and Corporate Financial Performance: Evidence from Jordan

Highlights

Corporate boards play a vital and significant role in monitoring and controlling corporate management and aligning the shareholders' and management interests, it’s deemed as the key and dominant internal governance mechanism (Brennan, 2006)
The main debate in the previous literature on the ability of corporate boards to monitor corporate management, as mentioned by Braun and Sharma (2007), has attracted attention and has been the main motivation for carrying out such research, where the influential in arising such problem was the waves of the collapse of mega-companies such as WorldCom, Enron and HIH Insurance, in addition to BCCI and Maxwell Publishing Group, which erupted in the early 2000s (Mizruchi, 2004)
The CEO duality shows that the CEO of 70% of Jordanian firms serves as chairman

Summary

Introduction

Corporate boards play a vital and significant role in monitoring and controlling corporate management and aligning the shareholders' and management interests, it’s deemed as the key and dominant internal governance mechanism (Brennan, 2006). The main debate in the previous literature on the ability of corporate boards to monitor corporate management, as mentioned by Braun and Sharma (2007), has attracted attention and has been the main motivation for carrying out such research, where the influential in arising such problem was the waves of the collapse of mega-companies such as WorldCom, Enron and HIH Insurance, in addition to BCCI and Maxwell Publishing Group, which erupted in the early 2000s (Mizruchi, 2004). The Jordanian corporate governance code included responsibilities and duties of the corporate board of directors to enhance corporate performance for example ensuring the integrity and adequacy of the internal control systems and reviewing and adopting a strategic plan of corporate (SDC, 2020). The contribution of the current study to the previous literature and build knowledge on the role of the corporate boards in the emerging market context

Methods

Results

Conclusion