The effect of board composition on corporate financial performance : evidence from trading and services listed companies at Bursa Malaysia / Halisa Rassa

In this study, board composition itself concerns the issues related to the type and number of board members in a company. Board of directors can be classified into independent non-executive directors and non-independent executive directors. This study aims to determine the relationship between board composition and corporate financial performance of trading and services listed companies at the Bursa Malaysia. Therefore, a descriptive research design was used to identify whether there is a relationship between board composition and corporate financial performance of listed companies at Bursa Malaysia. The population of interest in this study constituted all listed companies in trading and services sector quoted at the Bursa Malaysia for the period of five years from 2011 to 2015. Secondary data sources was used for the study, where corporate perfonnance (measured as Return on Assets) was extracted over the five years. The details regarding board composition was obtained from the annual report where the proportion of non-independent executive directors, proportion of independent non-executive directors and board size is disclosure. As hypothesized and in accordance with some previous researchers, this study found that the proportion of non-executive directors and the size of board have a significant strong positive impact on company's ROA.