Abstract
Reflecting investor expectations, most prior corporate governance research attempt to find the effect duality Role of Chief Executive Officer, board structures and firm financial performance. Specifically, we refer to devote this paper on investigating the relationship between the Duality Role of Chief Executive Officer (CEO), the CEO tenure, board structures and gender diversity with tow measurement of performance in listed companies in CAC 40. We found evidence provide that board characteristics are positively correlated to the firm’ performance. However, our results show a significant association between ROE, ROA and the board of directors’ composition. We find significant negative association between financial information and equity-based management compensation. On the other hand, the presence of independent directors on the board seems to affect, positively, the level of financial performance CAC 40 firms. Likewise, the stewardship theory assumption, the CEO duality is very high and is significantly associated with a higher level of firm performance. Our results suggest a constant negative relation between firm performance and CEO’s tenure. The results show that there is a significant relationship between board gender diversity and firm performance from our samples CAC 40 companies.
Conclusion
Several previous studies suggest that firm performance is significantly associated with board of directors’ composition and structure. Using ROE and ROA as the proxy for firm performance, the purpose of the study specifically is to investigate the relationship between the boards’ size, board independence, CEO duality, CEO tenure and gender diversity and tow measurement of performance in listed companies in CAC 40 for the period of 2011 to 2013. Referring to the literature review of corporate governance there are two alternative perspectives about the CEO duality; the agency theory advocates that the separation of the two roles is an important determinant to a board’s independence and effectiveness. In contrast, the stewardship theory postulates that firms with a unified leadership structure operate more efficiently through better coordination and unambiguous command, thus deal more effectively with strategic challenges. The leadership structure of CAC 40 companies is mostly characterized by the separation of roles of CEO and chairman and the mandatory turnover of CEO tenure.
The current study has both theoretical and practical implications. First and foremost, it takes considers the interactions between the board composition and firms characteristics when studying their effect on firm performance. Second, the empirical results show that firm financial performance increases with board independence, duality leadership structure and gender diversity firm size, and decreases with leverage level among French listed firms during the study period. The paper established how firm performance measuring shed light on the impact of board of directors’ composition, firm size and leverage. The findings of the study reveal that most out of the relationship expected are supported with a high level of significance.
