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Board characteristics and firm value for Indian companies

Rakesh Kumar Mishra (Indian Oil Corporation Limited, Noida, India)
Sheeba Kapil (Department of Finance, Indian Institute of Foreign Trade, New Delhi, India)

Journal of Indian Business Research

ISSN: 1755-4195

Article publication date: 10 January 2018

Issue publication date: 7 February 2018




This paper aims to explore the relationship between board characteristics and firm performance for Indian companies.


Corporate governance structures of 391 Indian companies out of CNX 500 companies listed on National Stock Exchange have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on asset [ROA]).


The empirical findings indicate that the market-based measure (Tobin’s Q) is more impacted by corporate governance than the accounting-based measure (ROA). There is a significant positive association between board size and firm performance. Board independence is found significantly related to firm performance. Number of board meetings is found to be sending positive signal to the market creating firm value. Separation of chief executive officer and chairman of the board is found to be value-creating, and overburdened directors affect firm performance adversely.

Research limitations/implications

Limitations of the study are in terms of methodology and possible omission of some variables. It is understood that the qualitative dynamics happening inside board meetings impact corporate performance. The strategic decision-making process adopted by the boards to fight competition or to increase market share is not easily available in public domain. The decision-making processes and monitoring for implementation of those decisions could impact corporate governance performance relationship. These parameters and their impact on corporate performance are not covered under the scope of the present study.


The paper adds to the emerging body of literature on corporate governance performance relationship in the Indian context by using a reasonably wider and newer data set.



Mishra, R.K. and Kapil, S. (2018), "Board characteristics and firm value for Indian companies", Journal of Indian Business Research, Vol. 10 No. 1, pp. 2-32.



Emerald Publishing Limited

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