Board Size, Board Independence, Board Expertise and the Financial Performance of Listed Manufacturing Firms in Ghana: Does Board Commitment Play a Role?

Abstract

This study focused on examining how board size, board independence, and board expertise relate to the financial performance of manufacturing companies listed on the Ghana Stock Exchange, considering the moderating role of board commitment. The study population had to do with the listed manufacturing firms in Ghana. This study employed a quantitative research method along with a causal research design. Secondary data (panel) were gathered from the annual financial reports of seven listed manufacturing companies from 2010 to 2022. It was discovered that board size has an insignificant effect on the financial performance (return on asset and return on equity) of listed manufacturing companies in Ghana. Board independence and expertise positively and significantly affect the financial performance of listed manufacturing firms in Ghana. This study found a positive but insignificant moderating effect of board commitment on board size and return on asset nexus. However, board commitment positively and significantly affects board independence and return on asset nexus, board expertise and return on asset nexus, board size and return on equity nexus, board independence and return on equity nexus, and board expertise and return on equity nexus. This study is the first to examine the moderating effect of board commitment on how board size, independence, and expertise relate to the financial performance of listed manufacturing companies. Aligned with the findings, we recommend that the management of listed manufacturing companies implement effective measures to improve the independence, expertise, and commitment of the board of directors.