Abstract
The purpose of this study is to investigate the impact of corporate governance, especially the characteristics of the chairman of the board of directors (BC) (tenure, expertise and directorships) on corporate performance (CP). It was conducted with data from the 44 companies registered in the financial sector on Bursa, Saudi Arabia, from 2015 to 2019, eventually totalling 195 firm-year observations. The results indicate that the BC’s tenure and expertise are positively associated with the financial firm’s performance. The attribute of multiple directorships held by the BC, on the other hand, has no relationship with corporate performance. The results help policy makers better understand BC characteristics, which can be incorporated into future policy to ensure the protection of shareholder investment and the interests of various stakeholders. The results may also be useful to legislators seeking to improve BC efficiency, overall corporate governance and investor confidence in the organization. To the researcher’s knowledge, the relationship between CP and BC characteristics has not been investigated, even although the chairman is in charge of appointing directors who could expand the company and make contributions not only to the board but also to CP (Owen & Kirchmaier, 2008). Therefore, this article contributes to the limited literature on the impact of BC characteristics on CP in the context of Saudi Arabia.
Corporate governance, Board chairman, Corporate performance, Finance sector, Saudi Arabia.