Title: Corporate Governance: Board of Directors' Strategic Role and Its Influence on Financial Function Automobile Companies registered and listed in Stock Exchange of Tehran
Abstract: Corporate governance is a crucial factor for efficiency and productivity improvement in any economy and economical system. It characterizes a set of mutual contacts and interactions among board of directors, corporate management, shareholders, and other stakeholders. Corporate governance provides a structure for development of corporate goals, facilities to accomplish those objectives, and means to supervise and watch over the corporate performance. Corporate governance mechanisms are important for company performance. This study investigates the internal mechanisms applied by board of directors and their effects on financial performance by strategic planning. It uses a case study of automobile corporations registered and listed in Tehran Stock Exchange. The role of directors' board in strategic management is decided and determined by their extent of involvement and participation in strategic planning. In order to measure the directors' board role in strategic management, this study employed a questionnaire prepared based on Hunger-Wheelen and Nadler Models. This questionnaire was distributed to 105 board members of auto companies listed in Tehran Stock Exchange. 75 questionnaires from 78 respondents were included in this study. The financial performance (Tobin's Q) was calculated based on corporate balance sheets. The findings of this study showed a significant relation between the board of directors' role in strategic management and financial performances. It means that board of directors with catalyst role, active participation, or nominal participation in strategic management had positive effect on corporate financial performance. In contrary, board of directors with minimal review, rubber stamp, or phantom roles in strategic management had negative effect on corporate financial performance. (Mahmoud Manouchehri Amoli, Ghasem Esmaeili. Corporate Governance: Board of Directors' Strategic Role and Its Influence on Financial Function Automobile Companies registered and listed in Stock Exchange of Tehran. J Am Sci 2013;9(12s):31-38). (ISSN: 1545-1003). http://www.jofamericanscience.org . 4
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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Cited By Count: 3
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