THE IMPACT OF OWNERSHIP STRUCTURE & BOARD STRUCTURE ON FINANCIAL PERFORMANCE: EVIDENCE FROM TEHRAN STOCK EXCHANGE

This study examines the relationship between ownership structure, board structure and firm financial performance (measured by ROE)in the listed companies in Tehran Stock Exchange. To do so we use five ownership and board structure characteristics in a sample of 311 firms during 2006-2011. These characteristics, designed to reduce agency problems between shareholders and managers, are ‘Ownership Concentration’, ‘Board Independence’, ‘Board Size’, ‘Institutional share ratio’ and ‘CEO duality’. Dependent variable in this study is ROE. The results using a panel data regression indicate a positive relationship between Board Size, Board Independence but a negative relationship between Institutional share ratio, CEO duality and firm performance. In addition, no significant relationship was found between Ownership Concentration and firm performance.