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Investigating the Relationship Between Board of Directors and Corporate Financial in Jordan

Received: 24 February 2020     Accepted: 9 March 2020     Published: 1 April 2020
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Abstract

This study provides clear evidences indication on the association of the board of directors and the corporate financial performance. This study investigates the relationship between board of directors’ mechanism namely (board size, board independence, board meeting frequency, and CEO duality) and corporate financial performance among industrial Jordanian listed corporations on Amman stock exchange (ASE) for the period 2016-2017. Corporate financial performance is measure by Return on Asset (ROA) and Return on Equity (ROE). This study contributes to the existing literature It adds values to the existing literature by providing extensive insights of the role of the board of director and corporate financial performance. The multiple regression analysis used to test the 4 hypotheses. Corporations listed in ASE are the subjects of this study for the years 2016 and 2017. The result of the independent variable namely board size, board independence, board meeting frequency, and CEO duality affects the Return on Asset (ROA) significantly. However, there is only one independent variable namely CEO duality that is insignificantly related to Return on Asset (ROA). Furthermore, the result of multiple regression analysis indicates that there is a significant relationship between highly linked to board size, board independence, and board meeting frequency and Return on Equity (ROE). On other hand contrary, the regression analysis shows the CEO Duality to be insignificantly related to Return on Equity (ROE).

Published in Journal of Finance and Accounting (Volume 8, Issue 2)
DOI 10.11648/j.jfa.20200802.11
Page(s) 59-63
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Corporate Financial Performance, Board of Directors, Corporate Governance, Jordan

References
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[8] Alwshah, K. A. A. M. (2009). The Impact Of Corporate Governance And Ownership Structure On Performance And Financial Decisions Of Firms: Evidence From Jordan. (PhD thesis), University of Hull.
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[10] Al-Kassar, T. A., & Al-Nidawiy, M. A. (2014). The Role Of Corporate Governance And Its Impact On The Share Price Of Industrial Corporations Listed On The Amman Stock Exchange. European Journal of Accounting Auditing and Finance Research, 2 (6), 106- 123.
[11] Matar, M., & Nauimat, Z. (2014). The Response of The Boards of Directors In the Distressed Jordanian Public Shareholding Companies to The Risk And Repercussions of The Global Financial Crisis. Jordan Journal of Business Administration, 10 (1).
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Cite This Article
  • APA Style

    Mohammad Tayseer Alshaboul, Mohammad Ahmad Abu Zraiq. (2020). Investigating the Relationship Between Board of Directors and Corporate Financial in Jordan. Journal of Finance and Accounting, 8(2), 59-63. https://doi.org/10.11648/j.jfa.20200802.11

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    ACS Style

    Mohammad Tayseer Alshaboul; Mohammad Ahmad Abu Zraiq. Investigating the Relationship Between Board of Directors and Corporate Financial in Jordan. J. Finance Account. 2020, 8(2), 59-63. doi: 10.11648/j.jfa.20200802.11

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    AMA Style

    Mohammad Tayseer Alshaboul, Mohammad Ahmad Abu Zraiq. Investigating the Relationship Between Board of Directors and Corporate Financial in Jordan. J Finance Account. 2020;8(2):59-63. doi: 10.11648/j.jfa.20200802.11

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  • @article{10.11648/j.jfa.20200802.11,
      author = {Mohammad Tayseer Alshaboul and Mohammad Ahmad Abu Zraiq},
      title = {Investigating the Relationship Between Board of Directors and Corporate Financial in Jordan},
      journal = {Journal of Finance and Accounting},
      volume = {8},
      number = {2},
      pages = {59-63},
      doi = {10.11648/j.jfa.20200802.11},
      url = {https://doi.org/10.11648/j.jfa.20200802.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20200802.11},
      abstract = {This study provides clear evidences indication on the association of the board of directors and the corporate financial performance. This study investigates the relationship between board of directors’ mechanism namely (board size, board independence, board meeting frequency, and CEO duality) and corporate financial performance among industrial Jordanian listed corporations on Amman stock exchange (ASE) for the period 2016-2017. Corporate financial performance is measure by Return on Asset (ROA) and Return on Equity (ROE). This study contributes to the existing literature It adds values to the existing literature by providing extensive insights of the role of the board of director and corporate financial performance. The multiple regression analysis used to test the 4 hypotheses. Corporations listed in ASE are the subjects of this study for the years 2016 and 2017. The result of the independent variable namely board size, board independence, board meeting frequency, and CEO duality affects the Return on Asset (ROA) significantly. However, there is only one independent variable namely CEO duality that is insignificantly related to Return on Asset (ROA). Furthermore, the result of multiple regression analysis indicates that there is a significant relationship between highly linked to board size, board independence, and board meeting frequency and Return on Equity (ROE). On other hand contrary, the regression analysis shows the CEO Duality to be insignificantly related to Return on Equity (ROE).},
     year = {2020}
    }
    

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    AU  - Mohammad Ahmad Abu Zraiq
    Y1  - 2020/04/01
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    DO  - 10.11648/j.jfa.20200802.11
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
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    AB  - This study provides clear evidences indication on the association of the board of directors and the corporate financial performance. This study investigates the relationship between board of directors’ mechanism namely (board size, board independence, board meeting frequency, and CEO duality) and corporate financial performance among industrial Jordanian listed corporations on Amman stock exchange (ASE) for the period 2016-2017. Corporate financial performance is measure by Return on Asset (ROA) and Return on Equity (ROE). This study contributes to the existing literature It adds values to the existing literature by providing extensive insights of the role of the board of director and corporate financial performance. The multiple regression analysis used to test the 4 hypotheses. Corporations listed in ASE are the subjects of this study for the years 2016 and 2017. The result of the independent variable namely board size, board independence, board meeting frequency, and CEO duality affects the Return on Asset (ROA) significantly. However, there is only one independent variable namely CEO duality that is insignificantly related to Return on Asset (ROA). Furthermore, the result of multiple regression analysis indicates that there is a significant relationship between highly linked to board size, board independence, and board meeting frequency and Return on Equity (ROE). On other hand contrary, the regression analysis shows the CEO Duality to be insignificantly related to Return on Equity (ROE).
    VL  - 8
    IS  - 2
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Author Information
  • Faculty of Business & Information Science, UCSI University, Kuala Lumpur, Malaysia

  • Faculty of Business & Information Science, UCSI University, Kuala Lumpur, Malaysia

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