العلاقة بين استقلالية مجلس الادارة واداء الشركة: دليل من البحرين

This study is based on Stewardship theory to explaining the relation between board of director’s independence and company performance in Bahrain. The study used panel data of (42) companies listed in Bahrain Bourse in the years (2009-2013). It also used several econometric techniques to confirm its results as: Firm Fixed-effect approach, Two-Stage Least Squares 2SLS and Generalized Method of Moments GMM to overcome the endogeneity effect that presents in this relation. The study found that there is an inverse effect of board independence on company performance which was measured using three different models: Tobin's Q, ROA and ROE. Based on these results, it was found that internal directors are more effective in enhancing the management of the company as information asymmetry problem and lack of company specific experience leads to inefficiency of independent directors in taking proper decisions that enhance company performance. Keywords: Independent directors; Firm performance; Bahrain Bourse; Stewardship theory; Agency theory.