 Does the board of directors influence the likelihood and resolution of financial distress?Khaldoon Ahmad Al Daoud and Ola Kamal Bani Yaseen International Journal of Managerial and Financial Accounting, 2024, vol. 16, issue 2, 229-248 Abstract: The current study investigated the effect of board of directors (i.e., CEO duality, independence, multiple directorships, politically connected directors, and size) on the financial distress measured using Altman's (1968) Z-scores model as a proxy for a firm's financial distress. A panel dataset of 260 firm-year observations from Jordanian industrial corporations listed on the Amman Stock Exchange from 2014 to 2018 was investigated. Using panel mixed-effect regression, the results show that board size and CEO duality have a significant impact in mitigating a firm's financial distress, while board independence, multiple directorships, and politically connected directors with financial distress were not statistically significantly associated with financial distress. These results indicate that a large board size accompanied by CEO duality leads to better oversight, reducing a firm's financial distress. The current study supports stewardship theory arguments that suggest that CEO duality improves the process of decision-making. Keywords: board of directors; Altman's Z score; financial distress; Jordan. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:injmfa:v:16:y:2024:i:2:p:229-248 Access Statistics for this article More articles in International Journal of Managerial and Financial Accounting from Inderscience Enterprises Ltd |
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