Corporate Boards and Performance. Does board composition affect financial performance among Swedish firms?

Abstract

Corporate boards are a central part of corporate governance. In this thesis I study the effect of board characteristics on corporate performance. I examine the effect of board size, gender diversification, independency and CEO as board member on performance. The study covers all firms listed in Sweden (Large, Mid and Small Cap) during 2005-2014. The results show a negative relation between board size and performance. Gender diversification, CEO as board member and board independency do not show to have any relation to financial performance in the Swedish setting. The results are robust to performance measures and estimation models. The evidence is in line with the hypotheses of larger sized boards incurring communication and coordination difficulties resulting in inefficient working methods.