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Does governance structure have any effect on firm performance during the financial crisis: Evidence from selected Indian companies

Naveen Kumar Srivastava (Thought Arbitrage Research Institute, New Delhi, India)

Journal of Strategy and Management

ISSN: 1755-425X

Article publication date: 16 November 2015




The financial crisis of 2008-2009 was truly global in nature that affected all sectors and countries of the world. Being considered that a board of directors is the main governance mechanism through which a company is governed and managed. The purpose of this paper is to examine the effect of the governance structure of a company on its financial performance during the period of financial crisis.


The study investigates the effect of board structure parameters – board leadership, directors and board size on the financial performance for 164 non-financial listed firms in India during the period of financial crisis of 2008-2009.


The study finds a significant positive effect with Chief Executive Officer duality, executive chairperson and proportion of inside directors on the firm’s financial performance. Independent directors have no significant influence, while non-executive (grey) director’s being affiliated with the firm has a negative influence on firm’s financial performance. A larger board has a negative relationship with the firm’s financial performance.

Research limitations/implications

The study is limited to large non-financial firms of the Bombay Stock Exchange-200 index. The study may be extended to include other firms to generalize the findings.

Practical implications

Results imply that during the period of financial distress, a company having more inside (or management) directors with an executive chairperson are in a better position to manage company resources with positive impact on financial performance. Companies with larger boards may find it difficult to take quick decisions, which ultimately affect their performance.


The study is original in its idea of assessing company strategy to adopt a suitable governance structure that can sustain its performance during the period of financial crisis.



The author wish to thank the Special Issue Editors and anonymous reviewers for providing notes that significantly improved the manuscript in all stages of the peer review process. The author declare that they have no conflict of interest with regard to the text and material used in this paper. The usual disclaimer applies.


Srivastava, N.K. (2015), "Does governance structure have any effect on firm performance during the financial crisis: Evidence from selected Indian companies", Journal of Strategy and Management, Vol. 8 No. 4, pp. 368-383.



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