The effect of board performance and structure on profitability of holding companies

Due to the economic scandals and financial crises in the world, corporate governance has become a concept that has attracted the attention and demand of the public. As the need for corporate governance has increased and it has been accepted and implemented worldwide, boards of directors have started to be accepted as one of the most important units of companies. Hence, the impact of the factors related to the structure and performance of the boards of directors on organizations' financial performance is a matter of curiosity. This study aims to examine the impact of board performance and structure factors on the financial performance of holding companies. As of January 2024, a total of 196 company data of 49 holding companies traded on Borsa Istanbul for the year 2022 and three prior years (2019, 2020, 2021) were analyzed by applying multiple regression analysis. Six independent variables related to board structure and three independent variables related to board performance were included in the research model. The findings of the research indicate that variables related to board performance and structure affect the financial performance of holding companies in different directions. For the year 2022 ratio of executive board members and participation rate of board members in meetings have a significant positive effect on both return on assets and return on equity of holding companies. On the other hand, the effect of ratio of independent board members for the same year was found to be negative on both profitability ratios. For the other past years, it was determined that while board size, and ratio of independent board members has a significant negative effect, ratio of female board members and use of an electronic portal to facilitate board work has a significant positive effect on holding companies profitability.