Board Attributes and Firm Performance of Non-Financial Listed Firms in Pakistan: Role of Ownership Structure

Abstract

Purpose: This research intends to explore the impact of board attributes on the performance of non-financial listed firms in Pakistan and how ownership structure plays a moderating role in shaping this link. This research posits that institutional shareholders possess motivations to enhance board governance due to their advanced financial knowledge and managerial expertise. Methodology: Four attributes of the board (board size, women on board, board independence, and board busyness) were studied to see the impact. The firm performance was measured using Tobin Q. The present study employs 80 non-financial listed firms in its sample, and the multiple regression approach was used to inspect a 12-year panel dataset. Findings: The results discovered that board size has a positive and significant influence on the performance of companies. However, board independence and women on board have a significant negative effect on firm performance. Moreover, the outcomes of this study indicate that the ownership structure acts as a moderator, influencing the correlation between board attributes (board size and board busyness) with non-financial listed firms’ performance in Pakistan. Implications: The current study provides useful insight into this relationship to the policymakers, government, researchers, and other stakeholders. Therefore, based on this study's findings, non-financial firms listed in Pakistan should consider adopting institutional shareholding as a strategy to strengthen their capacity to secure long-term financing to support their growth initiatives.

Keywords

• Board attributes
• Moderation analysis
• Firm performance
• Board characteristics
• PSX