The Impact of Board Characteristics on the Financial Performance of Tanzanian Firms

Assenga, Modest (2016) The Impact of Board Characteristics on the Financial Performance of Tanzanian Firms. PhD thesis, University of Gloucestershire. doi:10.46289/BUKJ5571

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Abstract

This study investigates the impact of board characteristics on the financial performance of listed Tanzanian firms. The study uses two theories of corporate governance to test the hypothesised relationships between board characteristics and financial performance. These are: namely, agency theory; and resource dependence theory and are complemented through the use of a stewardship theory. The study seeks to investigate the impact of the following variables on financial performance i) independent outside directors; ii) board size; iii) CEO duality; and iv) the board diversity aspects of gender, foreign directors and board skill. The study uses a mixed methods approach and applies a convergent parallel design (Creswell & Plano Clark, 2011), collecting quantitative data from annual reports and qualitative data from semi-structured interviews with 12 key stakeholders in corporate governance. Quantitatively, the study examines the balanced panel data of 80 firm-years observations (2006-2013) from the annual reports of 10 Tanzanian listed firms. The findings partially support agency theory since CEO duality was related with a reduction in financial performance. However, the findings do not support a relationship between the proportion of outside directors on boards and financial performance. The study provides some support for aspects of resource dependence theory, since the findings suggest that there is a positive link between gender diversity and financial performance. However, board size, board skill and foreign directors were not found to have a significant impact on financial performance. Furthermore, the interview findings provide some explanations of the relationships between board characteristics and financial performance by suggesting that the impact depends largely on the independence and proficiency of the individual directors on a firm’s board. The study contributes to the understanding of relationships between board characteristics and financial performance. The study uses, for the first time in this kind of research, Tanzanian data and the underutilised approach of mixed methods to corporate governance research. The study provides academic evidence for Tanzanian policy makers in relation to current and future governance reforms.

Item Type: Thesis (PhD)
Thesis Advisors:
Thesis AdvisorEmailURL
Aly, Doaadaly@glos.ac.ukhttps://www.glos.ac.uk/staff/profile/doaa-aly/
Hussainey, Khaledkhussainey2@glos.ac.ukUNSPECIFIED
Uncontrolled Keywords: Listed company financial performance; Board membership; Corporate governance reforms; Tanzania
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management > HD58 Organizational behavior, change and effectiveness. Corporate culture
H Social Sciences > HG Finance > HG4001 Finance management. Business finance
Divisions: Schools and Research Institutes > Gloucestershire Business School > Law, Accounting and Finance
Depositing User: Susan Turner
Date Deposited: 24 Sep 2021 13:43
Last Modified: 24 Sep 2021 13:43
URI: http://eprints.glos.ac.uk/id/eprint/10168

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