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Board composition and value relevance of Ghanaian firms: a seemingly unrelated regression approach

Board composition and value relevance of Ghanaian firms: a seemingly unrelated regression approach The purpose of this study is to examine the connection between board composition and value relevance of financial information in Ghana.Design/methodology/approachThe study uses a panel data of 144 firm-year observations of listed firms in Ghana.FindingsThe study finds that a higher fraction of independent directors is associated with lower firm value. The study further finds that board size is positively related to firm value, whereas duality is negatively associated with firm value.Practical implicationsThe practical implication of this paper is that investors and regulators should be mindful that specifying governance composition should not only be based on “so-called” codes of best practices but also the level of the country's or the sector's development and local institutional structures.Originality/valueThis study uses five different measurements of market share and considers the impact of the provision of the Code of Best Practices in Ghana. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic and Administrative Sciences Emerald Publishing

Board composition and value relevance of Ghanaian firms: a seemingly unrelated regression approach

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1026-4116
DOI
10.1108/jeas-09-2020-0163
Publisher site
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Abstract

The purpose of this study is to examine the connection between board composition and value relevance of financial information in Ghana.Design/methodology/approachThe study uses a panel data of 144 firm-year observations of listed firms in Ghana.FindingsThe study finds that a higher fraction of independent directors is associated with lower firm value. The study further finds that board size is positively related to firm value, whereas duality is negatively associated with firm value.Practical implicationsThe practical implication of this paper is that investors and regulators should be mindful that specifying governance composition should not only be based on “so-called” codes of best practices but also the level of the country's or the sector's development and local institutional structures.Originality/valueThis study uses five different measurements of market share and considers the impact of the provision of the Code of Best Practices in Ghana.

Journal

Journal of Economic and Administrative Sciences – Emerald Publishing

Published: Dec 1, 2022

Keywords: Board characteristics; Value relevance; Unrelated regression; Firm value

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