The board structure and firm performance in SMEs: Evidence from Spain
The aim is to analyse the efficiency of the board of directors as a corporate governance mechanism. Forthis purpose, we examine the effect of board composition, size, activity, leadership structure and CEOtenure on firm performance. To test our hypothesis we use a sample of 307 Spanish SMEs, none of...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2013 |
| País: | España |
| Institución: | Universidad del País Vasco |
| Repositorio: | Addi. Archivo Digital para la Docencia y la Investigación |
| OAI Identifier: | oai:addi.ehu.eus:10810/74247 |
| Acceso en línea: | http://hdl.handle.net/10810/74247 |
| Access Level: | acceso abierto |
| Palabra clave: | board composition board size SME duality CEO Tenure |
| Sumario: | The aim is to analyse the efficiency of the board of directors as a corporate governance mechanism. Forthis purpose, we examine the effect of board composition, size, activity, leadership structure and CEOtenure on firm performance. To test our hypothesis we use a sample of 307 Spanish SMEs, none of whichis listed. Our main empirical result is the negative impact of the outside directors proportion and boardsize on firm performance. The presence of outside directors can be said not to have resulted in improvedfirm performance. Despite the greater monitoring, advising and networking capacity attributed to outsidedirectors, the firms in the sample showed a significant presence of insider directors, an aspect that may berelated to their greater knowledge of the firm, with a subsequently positive effect on strategic planningdecisions. The negative effect of board size could indicate that the disadvantages of worse coordination,flexibility and communication inside large boards seem to be more important than the benefits of bettermanager control by the board of directors. |
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