Corporate Board Size and Financial Performance of Private Limited Companies in Uganda

Abstract

The paper seeks to compare the corporate board size and the financial performance of private companies in Uganda. Methodology-The paper adopted a positivist paradigm besides a cross-sectional study design. Researchers gathered quantitative data from 394 companies in Western and Central Uganda. An open questionnaire was administered to board members and executives from companies. Pearson correlation and standard regression techniques were used for data analysis. Findings-A significant positive relationship between the performance of the firm and the board size among private companies was established from the findings. Unique Contribution to Practice and Policy-This study will provide a precise and direct understanding of the relationship between board size and performance. The practical implications-The study recommends that private companies should recruit large boards of directors due to their diversified skills and connections that increase firm value. Research limitations-The study falls short of examining the influence of other characteristics of the board, such as composition, and leadership structure, on financial performance but solely concentrates on the board size. Besides, it was cross-sectional and generalized all private companies without considering industry-specific factors that could have changed the results. Originality/value-This is the first study that focuses on exploring the comparison between the corporate board size and the financial performance of private companies in Uganda.