Board Size and Company Performance

Student: Semenova Ekaterina

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Economics (Bachelor)

Final Grade: 9

Year of Graduation: 2020

The research is aimed at studying the effect of board size on company performance using Ukrainian data between 2007 and 2013. We found that board size has significantly negative impact on firms’ profitability proxying with ROA and ROE. This result is robust to various changes in econometric modelling. We also take into account the impact of the law (2008) obliging some firms to rise number of directors in the board. It turns out that few firms implemented the law, thus it did not influence profitability of firms in country. However, those firms who increased the size of the board with accordance to the law experienced drop in returns on assets and equity. All in all, it suggests that companies should be wise in choosing the number of directors on the board and, if possible, not to choose too large boards.

Full text (added May 20, 2020)

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