SPECIAL ISSUE PAPER Do ownership and board characteristics enhance firm performance? A corporate governance perspective Sadia Murtaza 1 | Asmara Habib 2 | Areeba Khan 1 1 Department of Management Sciences, The Islamia University of Bahawalpur, Bahawalpur, Pakistan 2 Department of Management Sciences, Khwaja Fareed University of Engineering and Information Technology, Rahim Yar Khan, Pakistan Correspondence Asmara Habib, Department of Management Sciences, Khwaja Fareed University of Engineering and Information Technology, Rahim Yar Khan, Pakistan. Email: asmarahabib14@gmail.com The main aim of the current study is to examine the relationship of ownership and board characteristics with firm performance of Pakistan non-financial firms. This study employed panel data and collected from the annual reports of Pakistan for the period of 2010–2017 and used the regression model. The findings of this study state that the managerial ownership and foreign ownership have a significant positive impact on firm performance measured by market share. Duality has a significant neg- ative and board independent is negative but not significant impact. Board size also has a significant positive relationship with firm performance. The good corporate governance is important which reduce the agency conflicts and enhance the stake- holder's interest. This study explores the link of ownership and board characteristics with firm performance examined by market share. The findings of this study will be helpful to the stakeholders, policymakers, government and practitioners. 1 | INTRODUCTION In the last decades, corporate governance plays a significant role in the field of finance (Fu, 2019). The ownership and board attributes are treated as the primary sources of corporate governance. The cor- porate governance is a key element in controlling, monitoring and measuring the firm performance (Aslam, Haron, & Tahir, 2019) and firm valuation (Bebchuk, Cohen, & Ferrell, 2008; Cuñat, Gine, & Guadalupe, 2012; Gompers, Ishii, & Metrick, 2003). Corporate gover- nance is treated as a basic element in developing countries. As corpo- rate governance code of Pakistan are determined by the Security and Exchange Commission of Pakistan (SECP) in March 2002 (Kazi, Arain, & Sahetiya, 2018) and stated that ownership structure and board characteristics are essential elements in firm performance in the corporate governance perspectives (Shah, Xiao, & Quresh, 2019). Firm ownership and management are considered primary indicators which can be helpful in controlling and monitoring effectively the plans, authority control, resource allocation and many other indicators which are useful for firm performance (Carney, 2005; Daily, Dalton, & Cannella Jr, 2003; Daspit, Chrisman, Sharma, Pearson, & Mahto, 2018). This study is mainly concerned with agency theory (Jensen & Meckling, 1976). Agency theory resolves the conflicts among managers and shareholders. Ownership is divided into two parts internal shareholders and external shareholders. Where internal shareholders are the investors who have full management control as well and external investors are those who have no management con- trol. This separation of ownership and control are necessary elements in the field of management and accounting (Alabdullah, 2018). The corporate control mechanisms have secured a great interest in the field of corporate finance (Fu, 2019) and initiated with the perception of agency theory (Holmstrom, 1979; Ross, 1973). Many researches state that it can enhance the firm valuation, growth and firm perfor- mance (Bhagat & Bolton, 2008; Cremers & Ferrell, 2014; Cuñat et al., 2012; Giroud & Mueller, 2011). This corporate control structure is categorized into internal and external governance (Baber, Liang, & Zhu, 2012; Gillan, 2006; Weir, Laing, & McKnight, 2002). The internal structure also includes the characteristics of the board of directors, board compensation and ownership structure (Jensen, 1993; Jensen & Meckling, 1976; Yermack, 1996). The external control system are the market policies, product and services image, market competitors and investors control (Jensen, 1986; La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1997). The literature is available in many ways like as deter- mining the interlinkage with of ownership characteristics, board com- position and firm performance (Abdallah & Ismail, 2017; Arosa, Iturralde, & Maseda, 2010; Bauwhede, 2009; Belkhir, 2009; Bhagat & Bolton, 2008; Chiang & Lin, 2007; Górriz & Fumás, 1996; Kapopoulos & Lazaretou, 2007; Lam & Lee, 2012; Lefort & Urzúa, 2008; Love & Klapper, 2002; Maury, 2006; Nicholson & Received: 11 June 2020 Accepted: 15 September 2020 DOI: 10.1002/pa.2515 J Public Affairs. 2020;e2515. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1 of 8 https://doi.org/10.1002/pa.2515