This study examines the relationship between board attributes and firm performance. In\naccordance with agency theory, effective board of directors plays a key role in establishing\ngood corporate governance and enhancing firm performance by mitigating earnings\nmanagement. Based on panel data set drawn from Tunisian listed firms over the period\n2011 - 2017 and while using dynamic panel GMM estimator to alleviate endogeneity\nproblems, a U-shaped relationship was found between board size, board independence and\nfirm performance. Indeed, results show that a higher firm performance is confirmed if the\nboard size is composed of at least 6 members and 15% of independent board members. For\na robustness check, this study measures a composite score of the effectiveness of board of\ndirectors to capture the aggregate impact of boardâ??s effectiveness on firm performance. The\nfindings of regression analysis find a significant positive relationship between the board\neffectiveness score and firm performance. Indeed, there is a synergy between mechanisms\nthat act together to enhance firm performance in the Tunisian context.
Loading....