The impact of board of directors characteristics on firm performance: Evidence from businesses listed on ho chi minh stock exchange (Hose)

Abstract

In the context of the economy gradually recovering from the negative impact of the COVID-19 pandemic, minimizing operational costs and maximizing profits remain the top concerns for businesses worldwide in general, and in Vietnam in particular. Among them, establishing a strong Board of Directors is a key factor contributing to the effectiveness of business operations. Although there have been numerous studies on the relationship between Board of Directors characteristics and business performance, there still exist contradictions and no unified conclusions have been reached. Therefore, to reconcile conflicting findings, the authors conducted an analysis of the relationship between Board of Directors characteristics and business performance using a sample of 164 non-financial listed companies on the Ho Chi Minh Stock Exchange (HOSE) over a 7-year period from 2016 to 2022. The authors found that the size of the Board of Directors, the frequency of Board meetings, and the presence of female representation on the Board are positively related to business performance, while increasing the number of shareholder representatives on the Board yields opposite results. In addition, the article provides recommendations and suggestions for building a strong Board of Directors to enhance the firm performance.