Does board structure index and ownership structure index impact on top listed Indian company's performance?

Abstract

This study investigates the association that exists between board structure index, ownership structure index and the financial performance of Nifty 100 Indian companies listed on the National Stock Exchange. The study intends to determine whether board structure index and ownership structure index have an impact on companies' performance measured by return on assets (ROA) and return on capital employed (ROCE). It provides empirical investigation for 73 non-financial firms in India from 2009 to 2016. The fixed effect model (FEM) regression was used to measure the association between the variables. Results indicate that board structure index and firm size have a significant impact on return on capital employed and return on assets. It is also observed that the ownership structure index and leverage have positive but insignificant impact on firms' performance. The research, therefore, proposes that policymakers and legislative bodies interpret this proof as a motive for them to improve the procedures of corporate boards to cope efficiently with the distinctive characteristics of corporate governance in emerging markets such as India by using Nifty 100 as a case. Copyright © 2020 Inderscience Enterprises Ltd.