Board characteristics, board leadership style, CEO compensation and firm performance

摘要

The study is dedicated to researching the aspects of good governance in terms of board characteristics, board leadership style and CEO compensation; and testing their relationship with the financial performance of Indian firms. Using panel data, the regression results are generated as the main effect of corporate governance variables on financial performance and also as an interaction effect using CEO duality dummy variable. The study found that the boards of the Indian firms are not truly independent, neither in terms of the number of independent directors on the board nor in terms of independence from management. The board leadership style of vesting more power to a single person has weakened the corporate governance system and has created various agency issues. Therefore, the study does not support the stewardship theory view of appointing the CEO as the chairman and urged a balance of power among key personnel of an organisation.