The Impact of BOD Characteristics considering the Rules of the Egyptian Corporate Governance Guide on the Financial Performance of Egyptian Companies: A Case Study on Industrial Sector’s Companies

Abstract

The current study aimed to reveal the impact of the characteristics of the board of directors, which were (the number of non-executive directors – the number of board members – the number of board meetings) on the financial performance in Egyptian joint-stock companies in the industrial sector by measuring (return on assets – return on equity – return on sales – earnings per share). The study adopted the descriptive analytical approach based on analyzing data obtained from (5) companies listed on the Egyptian Stock Exchange in official databases during the period from (2018-2022), and the study used a linear regression model to analyze financial data as a statistical method. This study concluded many results as follows: There is no statistically significant impact at the significance level (0.05) of the characteristics of the board of directors in light of the rules of the Egyptian Guide to Corporate Governance on the financial performance of Egyptian joint-stock companies in the industrial sector. There is no statistically significant impact at the significance level (0.05) of the characteristics of the board of directors on the return on assets considering the rules of the Egyptian Guide to Corporate Governance. There is no statistically significant impact at the significance level (0.05) of the characteristics of the board of directors on return on equity considering the rules of the Egyptian Guide to Corporate Governance. There is no statistically significant impact at the significance level (0.05) of the characteristics of the board of directors on return on sales considering the rules of the Egyptian Guide to Corporate Governance. There is no statistically significant impact at the significance level (0.05) of the characteristics of the board of directors on earnings per share considering the rules of the Egyptian Guide to Corporate Governance. The study recommended several recommendations, the most important of which are issuing a more stringent application of corporate governance legislation and activating the board of directors’ supervisory responsibility over management’s performance and behavior in managing the company’s financial operations by government and regulatory agencies. Keywords: BOD Characteristics – Corporate Governance Guide – Financial Performance