Corporate Board: Role, Duties & Composition / Volume 16, Issue 2, 2020
35
BOARD STRUCTURE, FIRM
PERFORMANCE AND RISK: RECENT
EVIDENCE FROM GREECE
Gerasimos G. Rompotis
*
* Department of Economics, National and Kapodistrian University of Athens, Greece
Contact details: National and Kapodistrian University of Athens, 81A Karaiskaki Str., Glyka Nera, Athens, Greece
1. INTRODUCTION
Given that, quite frequently, the administration of a
modern company and its ownership are separated
from each other, the various corporate governance
codes and laws around the globe require that the
board of a firm work in the best interest of the
owners. In other words, the board should always
seek to maximize the profit of the shareholders.
From an empirical point of view, the separation of
Abstract
How to cite this paper: Rompotis, G. G.
(2020). Board structure, firm performance
and risk: Recent evidence from Greece.
Corporate Board: Role, Duties and
Composition, 16(2), 35-46.
https://doi.org/10.22495/cbv16i2art3
Copyright © 2020 The Author
This work is licensed under a Creative
Commons Attribution 4.0 International
License (CC BY 4.0).
https://creativecommons.org/licenses/by
/4.0/
ISSN Online: 2312-2722
ISSN Print: 1810-8601
Received: 06.05.2020
Accepted: 02.07.2020
JEL Classification: G32, G34, L25
DOI: 10.22495/cbv16i2art3
This paper examines the relationship between the
characteristics of the board and the performance and risk of a
firm using data from forty-five Greek listed companies over the
period 2015-2018. The analysis considers various alternative
performance measures, both accounting-based and stock-based,
as well as two measures for risk. The board characteristics
considered are the size of the board, the number of female
members on the board, the number of non-executive members
on the board, and the duality regarding the roles of the chief
executive officer (CEO) and the president of the board. As far as
the board size is concerned, the results show no significant
impact on performance. This finding is in line with past studies
on Greek companies. On the contrary, the presence of women
on the board seems to be negatively related to performance.
The same seems to be the case for the non-executive members,
especially when the stock returns are taken into consideration.
Finally, when it comes to duality, the results indicate the
occupation of the president and CEO roles by the same person
exerts a positive impact on firm performance decreasing, at the
same time, its risk. This study contributes to the literature in
various ways. First, it uses the most recent data from the Greek
market. Furthermore, from a political point of view, the study
covers a very interesting period, given that during 2015-2018
Greece had for a first time a left-wing government, a factor that
could possibly affect the conduction of business in Greece. In
addition, the finding that the duality in the roles of CEO and
president can lower the risk of a firm is a new finding. Finally,
in general, the results confirm the conclusions of the previous
studies on Greek companies about the poor impact of the board
on firm performance.
Keywords: Board of Directors, Size, Female Members,
Non-Executive Members, Performance, Risk
Authors’ individual contributions: The Author is responsible for all
the contributions to the paper according to CRediT (Contributor
Roles Taxonomy) standards.
Declaration of conflicting interests: The Author declares that there is
no conflict of interest.