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Impact of Board Composition on Firm Performance

This study assesses the composition of boards of directors and its impact on firm performance in Somalia, focusing on managing, working, and policy boards. Results indicate that a managing board positively influences firm performance, while the working board sets financial targets and the policy board develops strategy. Recommendations include enhancing board evaluations to improve decision-making and skill development among directors.

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Abdimajid Ali
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5 views1 page

Impact of Board Composition on Firm Performance

This study assesses the composition of boards of directors and its impact on firm performance in Somalia, focusing on managing, working, and policy boards. Results indicate that a managing board positively influences firm performance, while the working board sets financial targets and the policy board develops strategy. Recommendations include enhancing board evaluations to improve decision-making and skill development among directors.

Uploaded by

Abdimajid Ali
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

ABSTRACT

board of directors is the key element of corporate governance, it is clear that its composition
must be responsive to the basic functions that are assigned to it: supervising and monitoring,
avoiding opportunistic behaviour on the part of executives, and providing advice to decision
makers to improve the management of the business. The prime objective of this study was to assess
composition of board of directors and its impact on firms performance.

This study was guided by three objectives which where to describe the effect of managing broad on
firm’s performance in Somalia, to investigate the effect of working board on firm’s performance
in Somalia and lastly to describe the effect of policy board on firm’s performance in Somalia.

To achieve the above-mentioned objectives, The study used a descriptive research design using purposive sampling
as the sampling procedure and a questionnaire as a tool to collect data from the respondents, using statistical
packages for social science (SPSS) to analyse the data. a sample of forty four people was selected from the target
population and questionnaire was used as a research instrument.

1The result of the study shows that the managing board on the firm has positive impact on firms performance, the
study also found that working baord identifies and approves targets of financial performance of the firm . Lastly
the researchers also found that the the policy board is responsible for regulations and development of the firm's
strategy .

The researcher recommend that the utility of board evaluations for the company needs to be better demonstrated
in helping to evaluate boards‟ compositional needs for different skills and qualifications; for becoming a better
decision-making body; and even for the individual director, in developing the understanding, skills and
qualifications necessary to be an effective board.

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