Corporate Governance in Action: The Interplay of Ownership Structure, Board Composition, and Firm Performance

Abstract

This study investigates the impact of institutional ownership and board structure on firm performance in an emerging market context. Using a twelve-year panel (2013–2024) with a random effects model, the results show that institutional ownership and board size significantly enhance performance, measured by return on assets (ROA) and return on equity (ROE). Institutional investors improve monitoring and accountability, reducing agency costs, while larger boards provide diverse expertise and networks that support stronger outcomes. Firm size also demonstrates a consistent positive effect, reflecting economies of scale. In contrast, board independence and gender diversity show limited influence, suggesting their effectiveness depends on institutional and cultural factors. The study extends corporate governance literature by jointly considering ownership and board attributes, highlighting the value of institutional investors in improving governance. For regulators, the findings stress the need to foster institutional investment, while for firms, they point to board expansion as a strategic advantage.