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Board Characteristics and Firm Performance Among Kuwaiti Companies

Al-Matari, Ebrahim Mohameed Ayadh (2011) Board Characteristics and Firm Performance Among Kuwaiti Companies. Masters thesis, Universiti Utara Malaysia.

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Abstract

The issue revolving around corporate governance has always been an essential and critical element for both private and public sectors particularly in Kuwait. Kuwait's Prime Minister has even stressed for more concentration on the issues of governance for the purpose of overseeing the effective running of the public and private sector through a check and balance system. Moreover, the Prime Minister argued the need of the firms in the country to benchmark to an effective system that emphasizes on positive issues such as ethics, openness, accountability, transparency, and integrity in the public and private sector. Therefore, this crucial issue has to be addressed accordingly in order to enhance the performance of firms. It has been generally believed that good corporate governance is a critical factor in the improvement of firm value in both developing and developed financial markets. However, this belief overlooked the fact that the relationship between corporate governance and the value of a firm varies in developing and developed financial markets owing to the character of the corporate governance structures existing in the markets based on dissimilar social, economic and regulatory conditions. This reality calls for the need to examine and comprehend the differences affecting the firm value for the purpose of academic, financial and management practices and public regulation of markets and corporations. The core aim of the present study is the examination of the relationship between board characteristics and firm performance of non-financial, listed Kuwaiti firms on the Kuwaiti stock exchange. For the purpose of the study, data was collected from a sample of 136 companies for the financial year of 2009. Among corporate governance's various variables, five were chosen to be included in the study namely CEO duality, COE tenure, audit committee size, board size and board composition and one measures namely return on assets (ROA) was chosen as measures of firm performance. Furthermore, regression analysis was utilized for the examination of the relationship between board characteristics and firm performance. The result indicates that the relationship between CEO duality and ROA is positive in the significant level. Therefore, this result found that the relationship between CEO tenure and ROA is negative in the significant level. By contrast, this result found that the relationship between audit committee size with ROA is positive with significant level. In addition to that, this result found that the relationship between board size and board composition is negative but not significant. Furthermore, this study using firm size and leverage as a control variables found that the relationship between firm size and ROA is positively insignificant. Finally, the outcome of the relationship between leverage and ROA is negatively significant.

Item Type: Thesis (Masters)
Uncontrolled Keywords: Corporate Governance, Board Characteristics, Firm Performance, Kuwaiti Listed Companies
Subjects: H Social Sciences > HD Industries. Land use. Labor.
Divisions: Othman Yeop Abdullah Graduate School of Business
Depositing User: Mr Husni Ismail
Date Deposited: 30 Jul 2012 05:01
Last Modified: 18 Apr 2016 04:16
URI: http://etd.uum.edu.my/id/eprint/2898

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