Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 206

Full Length Research Paper

Board size and firm performance in developing counties: Case of East Africa

David Namanya
  • David Namanya
  • College of Business Management Sciences (CoBMS), Makerere University, Kampala, Uganda.
  • Google Scholar
Geoffrey Nuwagaba
  • Geoffrey Nuwagaba
  • College of Business Management Sciences (CoBMS), Makerere University, Kampala, Uganda.
  • Google Scholar
Festo Tusubira Nyende
  • Festo Tusubira Nyende
  • College of Business Management Sciences (CoBMS), Makerere University, Kampala, Uganda.
  • Google Scholar


  •  Received: 15 June 2021
  •  Published: 31 July 2021

Abstract

The main objective of this study was to examine the influence of board size on the financial performance of listed companies within the East African Community (EAC) and make recommendations on the board size that can enhance company financial performance within the EAC. The research adopted a positivist paradigm in a quantitative analysis using non-probability sampling to select forty-two listed companies listed on the EACs stock markets between 2008 and 2014. We developed our hypothesis based on secondary data from databases, company’s published annual reports, and websites. We used Microsoft excel and SPSS to generate, manage and analyses data used in the descriptive statistics, correlation, and regression outputs. Results from our regression analysis were inconclusive and hence we were unable to generalize the relationship between board size and company performance moderated by total assets and market capitalization. The descriptive statistics result suggests that the optimal board size in EAC lies between nine and ten members. We thus recommend to EAC-listed companies to adopt board size of nine directors to avoid the drawback of large boards such as limited members’ participation, lack cohesion and consensus due to widespread opinions which may deter the board from carrying out its advisory and monitoring functions.

 

Key words: Board size, East African Community (EAC) stock markets, financial performance.