Corporate Governance and Strategic Decision-making: an Empirical Study of Board Composition and Performance Outcomes
Year: 2026
Type: article
Abstract: Corporate governance has been cited as one of the reasons that result in the success of an organization, and board composition has been cited as one of the key elements of firm performance. The other board characteristics that have been set to influence the strategic decision making and financial performance are the board size, independence, gender diversity, and foreign directors. It is questionable how these affect the performance of firms. The study was an empirical study of a quantitative nature that sought to examine the relationship between board composition and firm performance. The publicly listed companies were used to collect data based on some of the major variables, which included board size, board independence, gender diversity, and foreign directors. The regression analysis was done to estimate the Return on Assets (ROA), Return on Equity (ROE), and Market Capitalization to estimate the effect of the factors on the financial performance indicators. The research established that the independence of the board and the gender diversity of the board positively and significantly influenced the financial performance and the market capitalization. The more the gender and independence of the board, the better the financial performance of the company. The performance of the firm was loosely related to the size of the board and this was a pointer that the smaller boards could be more effective. The contribution of foreign directors was relative to an extent as they affected the performance a bit. The findings show that board composition is pertinent in the enhancement of the performance of firms. The companies should focus on gender diversity and independence of the board as a way of improving governance and performance. It is also possible to analyze other forms of diversity and the effects of the decision-making process in the board on the corporate performance using the future.
Source: Research
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7214977632