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Corporate Finance and Governance: The Effect of Board Composition on Financial Decision-Making

Author

Listed:
  • Mir Beburg Lehri

    (Research Scholar, IBMS, University of Balochistan, Pakistan)

  • Waqar Sadiq

    (PhD, Air University, Multan Campus, Islamabad, Pakistan)

  • Muhammad Faheem Ullah

    (Research Scholar, Institute of Business Management Sciences, University of Agriculture Faisalabad, Pakistan)

  • Muhammad Musaddique Latif

    (Research Scholar, Fast School of Management, National University of Computer and Emerging Sciences, Pakistan)

Abstract

This study examined the impact of board composition on financial decision-making in corporate governance. Using a sample of 500 publicly traded companies from 2010 to 2024, we analyzed the relationship between board characteristics (size, independence, diversity) and financial outcomes (return on assets, debt-to-equity ratio, dividend payout). Employing partial least squares structural equation modeling (PLS-SEM), our findings revealed that board independence and diversity positively influenced financial performance and risk management. However, board size showed a non-linear relationship with financial outcomes. These results contribute to the ongoing discourse on optimal board structures and their role in enhancing corporate financial governance.

Suggested Citation

  • Mir Beburg Lehri & Waqar Sadiq & Muhammad Faheem Ullah & Muhammad Musaddique Latif, 2024. "Corporate Finance and Governance: The Effect of Board Composition on Financial Decision-Making," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(3), pages 165-170.
    • Handle: RePEc:rfh:bbejor:v:13:y:2024:i:3:p:165-170
    DOI: https://doi.org/10.61506/01.00430
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    References listed on IDEAS

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