The Impact of Board Diversity, CEO Characteristics, and Board Committees on Financial Performance in the Case of Romanian Companies

Bogdan Aurelian Mihail, Dalina Dumitrescu, Carmen Daniela Micu and Adriana Lobda
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Bogdan Aurelian Mihail: Doctoral School of Finance, Bucharest University of Economic Studies, 6 Piata Romana, 010374 Bucharest, Romania
Dalina Dumitrescu: Department of Finance, Bucharest University of Economic Studies, 6 Piata Romana, 010374 Bucharest, Romania
Carmen Daniela Micu: Department of Masters in Board Practice and Directorship, Henley Business School, University of Reading, Greenlands Campus, Henley-on Thames RG9 3AU, Oxfordshire, UK
Adriana Lobda: Department of Masters in Board Practice and Directorship, Henley Business School, University of Reading, Greenlands Campus, Henley-on Thames RG9 3AU, Oxfordshire, UK

JRFM, 2021, vol. 15, issue 1, 1-16

Abstract: This paper examines the impact of board diversity, CEO characteristics, and board committees on the financial performance of the companies listed on the Bucharest Stock Exchange (BSE). In order to test the influence of these characteristics, detailed data on more than 70 firms are collected by hand, for the 2016–2020 period, and comprehensive regression models are estimated. The findings show that there are positive effects of board diversity especially with regard to the independent board members. In terms of the board committees, the audit committee is found to have a favourable influence. The regression coefficients imply that a 10% increase in the share of independent board members would be associated with a 0.93% increase in ROE. Based on these findings, it can be argued that improving the corporate governance practices of the companies listed on the BSE would increase the performance and the value of these firms.

Keywords: corporate governance; firm performance; board diversity; CEO characteristics; board committees; Romania (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
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