The relationship between boards structure and firm performance: Evidence from firms quoted on Borsa Istanbul

The firms are represented and managed by their board of directors. The boards play a very important role in applying a corporate governance in a firm. In Turkey, the biggest percentage in corporate governance rating belongs to the board of directors. The aim of this study is to demonstrate the relationship between the board structures and financial performance of the firms in Borsa İstanbul as taking their sizes into consideration. In earlier studies, the relationships between the firm's financial indicators and the variables such as the board sizes of the firms, board members' ages, their wages, their number of years in service were assessed in a way that it will take a big place in literature. In this study, the sizes of the firms were also taken into consideration and the relationship between various features of the board members and the firm performance was examined. In order to determine the analysis units of this study, the secondary data of public firms whose shares are publicly traded, were investigated and 58 firms whose data are completely accessed, were selected as an analysis unit. In the analysis, those 58 firms' annual data between 2012 and 2018 were used. 6 of the variables belonging to the firm's board members were used. Those independent variables consist of the independent board members who takes part in the firms' boards and serving to the boards of directors of more than one firm, the members who holds a membership to the legal entities related to the business life such as associations and chambers, who are general business management expert or expert in the sector of the firm, who has financial experience and who are academician members. As the firms' financial performance indicators, return on asset ratios were used. The relationships between those variables were examined by using the panel data analysis method. Some significant relationships were found between some variables representing the firms' board structures and return on asset ratios. It was found that the independent members who takes part in bigger firms' boards and serves to the boards' of more than one firm and academician members have a negative effect on return on assets. It was also found that the independent members who takes part in smaller firms' boards and serves to the boards' of more than one firm and the members who are expert in the sector of the firm have a negative effect on return on assets.