The Effects of Board and Ownership Structures on the Performance of Publicly Listed Companies in Egypt

Hanaa Abdelkader El-Habashy

Abstract

This paper examines the association between some features of corporate governance mechanisms and performance in listed firms in Egypt, one of the emerging countries. Governance is measured as a multidimensional composite indicator consisting of the board characteristics and ownership structure. The performance is measured by a composite index which includes the ROA, ROE, and Tobin’s Q. A sample of 240 observations from balanced panel data set of the 40 most active non-financial companies was collected from 2009 to 2014. The panel data regression was used for hypothesis testing. The findings showed that governance index has a high significant positive influence on firm performance index. Furthermore, institutional shareholding has the strongest impacts on firm performance index PERF and on all individual performance variables. Managerial ownership and ownership concentration have insignificant impact on accounting and market performance. The findings indicate a positive correlation between board size and performance. To the best of our knowledge, no study has yet measured governance and performance as composite indexes in non-financial companies in Egypt and/or the Middle Eastern countries.