The aim of this study is to explore the link of board characteristics as a
feature of corporate governance perspective and firm financial
performance. This empirical study focuses on non-financial listed firms
covering 65 industrial ones of the Jordanian non-financial sector.
Multiple regression analysis instruments have been used to investigate
the hypothesis on data collected for the year 2017. Accounting-based
measurements have been utilized for measuring firm financial
performance. On one side, empirical findings of the current study
indicate that separation of CEO and chairman of the board is revealed to
positively affect firm financial performance that helps in enhancing
decision-making to improve firm financial performance, which also prior
studies confirm its important (e.g., DeBoskey, Luo, & Zhou, 2019;
Hoitash & Mkrtchyan, 2018); on the other hand, the findings indicate
that board size is insignificant in its relationship with firm financial
performance and this result is in line with some previous studies (e.g.,
“NEW CHALLENGES IN CORPORATE GOVERNANCE: THEORY AND PRACTICE”
Naples, October 3-4, 2019
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Alabdullah, 2018; Alabdullah, Nor, Ahmed, & Yahya, 2018; Alabdullah,
2016a; Alabdullah, 2016b; Alabdullah, Yahya, Nor, & Majeed, 2016;
Cabeza-García, Fernández-Gago, & Nieto, 2018; Galbreath, 2018), which
in turn doesn’t help in enhancing the performance. Results of the current
study also reveal that firm financial performance is not related to board
independence. The outputs of the analyses supported that firms
responding with good corporate governance mechanisms, being as a very
ancient system (Alabdullah, Yahya, & Ramayah,, 2014a), might achieve
higher firm financial performance (Sitorus & Murwaningsari, 2019;
Lamoreaux, Litov, & Mauler, 2019; Alabdullah, 2016, 2017; Alabdullah,
Yahya, & Ramayah, 2014b). This means that good corporate governance
mechanisms alleviate the effect of agency costs. Yet, it leads to the notion
that developing countries might possibly promote their firm financial
performance by implementing good corporate governance mechanisms.
Away from traditional system of previous studies and instead of utilizing
a single measurement, a set of measurements of CG and firm financial
performance mechanisms are used. Also, the sample of the current study
also covers the majority of industrial firms in Jordanian non-financial
sector.