The impact of board size on firm performance: evidence from the UK

  title={The impact of board size on firm performance: evidence from the UK},
  author={Paul Guest},
  journal={The European Journal of Finance},
  pages={385 - 404}
  • Paul Guest
  • Published 1 June 2009
  • Business, Economics
  • The European Journal of Finance
We examine the impact of board size on firm performance for a large sample of 2746 UK listed firms over 1981–2002. The UK provides an interesting institutional setting, because UK boards play a weak monitoring role and therefore any negative effect of large board size is likely to reflect the malfunction of the board's advisory rather than monitoring role. We find that board size has a strong negative impact on profitability, Tobin's Q and share returns. This result is robust across econometric… 
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