The sustain their competitive positions. In a dynamic environment,

contemporary business environment is characterised by uncertainty and risk,
making it increasingly difficult to forecast and control the tangible and
intangible factors which influence firm performance. Customers are becoming
more demanding, necessitating increased focus on managerial professionalism and
quality of service delivery. In response to the external pressures, firms
resort to different strategic responses such as restructuring, downsizing,
business process reengineering, benchmarking, total quality management,
management by objectives etc., to improve and sustain their competitive

a dynamic environment, boards become very important for smooth functioning of
organisations. Boards are expected to perform different functions, for example,
monitoring of management to mitigate agency costs hiring and firing of
management, provide and give access to resources, grooming CEO and providing
strategic direction for the firm. Boards also have a responsibility to initiate
organisational change and facilitate processes that support the organisational
mission. Further, the boards seek to protect the shareholder’s interest in an
increasingly competitive environment while maintaining managerial
professionalism and 2 accountability in pursuit of good firm performance. The
role of board is, therefore, quite daunting as it seeks to discharge diverse
and challenging responsibilities. The board should not only prevent negative
management practices that may lead to corporate failures or scandals but also
ensure that firms act on opportunities that enhance the value to all
stakeholders. To understand the role of board, it should be recognised that
boards consists of a team of individuals, who combine their competencies and
capabilities that collectively represent the pool of social capital for their
firm that is contributed towards executing the governance function . As a
strategic resource, the board is responsible to develop and select creative
options in advancement of the firm. Given the increasing importance of boards,
it is important to identify the board characteristics that make one board more
effective from another. This study seeks to identify and examine the board
characteristics that make it effective and contribute towards firm performance.

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current study aims to examine the relationship between board characteristics
and firm performance with respect to listed firms in USA market, using a sample
of U.S. 66 public companies from 2004 to 2015. We argue that the effects of
corporate governance (i.e., board dependence and CEO duality) and managerial
share ownership will be affected for firm performance. Further, we contend that
while good governance and managerial incentives are necessary conditions for
superior performance, they are not on their own sufficient to ensure superior
performance – we also need to consider the capacity of the directors on the
board to perform their duties because their ability to provide resources and
monitor managers varies. For example, companies A and B have the same governance
structure and managerial share ownership, but the members of company’s A’s
board of directors have better skills and expertise than the members of company
B. All else being equal, it is logical to expect that company A’s board of
directors will perform better at helping managers to perform their duties and
conducting manager-monitoring activities than company B’s board.

The remainder of the paper is organized as follows.
Section 2 discusses previous literature in order to develop the hypotheses. Section
3 presents the hypothesis development. Section 4 explains the sample selection,
research design and how the variables used in the study are measured. Section 5
presents the results of the statistical analyses. Section 6 provides general
discussions of the main results the limitations of this study, and directions
for future research.