The Role of BOD

The board of directors has the responsibility to make sure that corporate behavior conforms to
best governance practices. This involves directors to exhibit certain behavioral norms, including:
(a) informed and deliberative decision-making; (b) evenhanded performance of duties owed to
the company and to shareholders as a Class. (c) Effective monitoring of management; and (d)
division of authority evenhanded performance of duties owed to the company and to
shareholders as a Class.
BODs responsibilities inherently demand:
The exercise of judgment
Selecting a chief executive from a pool of candidates involves decision-making that

cannot be reduced to a mechanical series of steps.

Determine an appropriate corporate appetite for risk
Guiding business strategy
Monitoring and supervisory functions may comprise a range of reasonable approaches.
Ensure the integrity of accounting and financial reporting systems and oversee the
process of disclosure and communications
Corporate culture in public companies

While social norms can be of value to improve, they are not without cost. The need to "maintain
your" limits the flexibility of management, especially in a changing environment. These
increases in costs with a number of different groups have in the company. In Enterprise Co., and
two related groups are customers and employees. When it goes public company, and there is also
a shareholder, bonds, and possibly the public if the company was a big enough to be relevant in
the community or the state. The most important thing in the Executive President of the company
told shareholders can be observed by employees, thus creating important interaction between the
communications and public relations in the telecommunications and staff of the private market
who could jeopardize the credibility of senior managers (Farrell and cracks 0.1989). For
example, if it is found to violate internal rules in public institution, to take the punishment
decision, Chief Executive Officer of the company it has to send two signals: the managers and
internal staff, who also serves as a deterrent to future violations and external to the market that

maintain the transparency of the internal procedures. The latter raises the risk of exposure to
(MIS) interpreted by the market and the tip of the iceberg rather than the occasional incident,
leading to the senior management of the commutation internal message. These complications
weaken standards of integrity in listed companies face-to-face private companies. Public
ownership (and different mechanisms for corporate governance) also alter the balance between
the costs and benefits of strict safety. It makes the public offering market value of shares of
companies with a very prominent point data. To the extent that price accommodate all relevant
information management want to maximize shareholder value by maintaining the rules of
procedure in line with the increase in value. Yes - but, it is not considered some of the assets (or
appreciated in the short term), and public ownership creates a distortion in the decision-making
process. 8 Edmans (2011) shows that the 100 companies listed in the "best places to work"
(measured GPTW order) has a performance share, up abnormal in the years after the inclusion.
Edmans it says, and this is proof that the market value of some intangible underappreciates
especially intangible GPTW enter the index. Since integrity, trust plays an important role in
defining the GPTW, we can interpret this result as saying that the market reduces the safety of
the capital value. Consequently, the general manager of the company is devoted to maximize the
current market value of the company's resources tend to lack of investment in integrity, which in
the short term to have a clear cost, but only of limited usefulness.
Finally, public ownership is the separation of ownership and control, and executives of public
companies is not always driven only by maximizing shareholder value because they do not fully
absorb the cost of deviation from the maximum value. As a result, public companies would, on
average, and keep the weak culture of integrity. In fact, corporate governance in public
companies is the mechanism by which investors in the company ensures that the director of the
company makes decisions that maximize the return on investment (Schleifer and Vishna 0.1997).
That this view means that if a culture of integrity in fact translate into positive results for
shareholders, is to maintain the managers of public companies with the best corporate
governance as a value for companies
Size- PROPDNEDS)
Council composition refers to the number of members of the Board of Directors Non-Executive
in Council with regard to executives. Non-executive directors (NEDS) are outside directors who

control the decisions taken by the executive management. There are two opinions about the
contradictory independent directors: those who prefer the appointment of more independent
directors on the boards and those who prefer a more Executive Directors on the boards.
Arguments are based to set a more independent directors on three theories: agency, dependency
theory of resources and references. According to the agency theory, and councils controlled by
executives (insiders) less responsible (Fama, 1980, p.293; Soninfeld, 2002, P.108). Independent
directors, on the other hand, bring an independent judgment on the decisions (for example, the
report of Cadbury 1992); the provision of the company's resources in the form of experience,
knowledge, contacts and reputation (Hanifa and Hdaib, 2006, p.1039); and the implementation of
the control function in a manner effective because of a competitive labor markets and
management efficiency, both inside and outside the company (Fama, 1980, pp.292-294; Fama
and Jensen, 1983a, p 0.315). Fama (1980, p.293), and Fama and Jensen (1983a, p.313) say that
once the most important achievements of the internal control management to the Board of
Directors of the company is likely to turn a blind eye and collusion with each other to confiscate
the wealth of shareholders. The appointment of independent directors on the board has the ability
to reduce the collusion of the independent directors have incentives to develop a reputation as
experts in control of the decision (Fama and Jensen, 1983).
However, seeing the contrast based on management theory is that boards dominated by
independent directors may have a negative effect on the final results (Baysinger and Hoskisson,
1990, P.74; Weir Wing, 2000, p.267; Bozec, 2005, p. 1927). Ware says Wing (2000, p.267) that
the independent directors often send less business knowledge and find it very difficult to
understand the complexities of the company. This problem is compounded by the fact that
outside directors are part-time employees who usually sit also in other corporate boards (Bozec,
2005, p.1927). As such, they spend little time monitoring and advisory duties. According to the
theory of management, managers trustworthy people who are basically good stewards of the
resources entrusted to them well (Donaldson and Davis, 1994, p. 51 ;. Nicholson agent, 2007, p.
588.). In addition, since the inside (or executive) Management spend their lives working in the
rule company, a better understanding of the outside directors companies and that decisions could
be higher take (Donaldson and Davis, 1994, p. 51 ;. Nicholson agent, 2007. p. 588). Accordingly,
supporters argue that management theory will be linked to higher corporate performance for the
majority of executives, which works naturally to maximize profits for shareholders (Nicholson

agent 0.2007, p 0.588). By implication, that the decisions taken by the Council is dominated by
independent directors be of lower quality, and this in turn will lead to a decline in the company's
performance. As it has been said that the boards of directors controlled by outside directors tend
to suppress acts of initiative and strategic management, arising from excessive administrative
supervision and lack of knowledge of the business to be truly effective (and Hdaib Hanifa, 2006
p.1039).
Previous studies on the effect of the high proportion of independent directors and the company is
conflicting results. Some studies have reported detection of significant positive associations
between the proportion of independent directors and the levels of Voluntary Disclosure (Chen
and Jaggi, 2000 ;. Hanifa PG 144 and Cook, 2002) due to a positive impact on management
decisions (independent directors) to disclose financial information. It has also been found to
include members of the non-executive directors on the boards to increase the company's
compliance with disclosure requirements that would lead to a more complete financial disclosure
(Chen and Jaggi, 2000). The CG studies also found a positive correlation between the percentage
of non-executive directors on the board and ownership of foreign stocks and foreign investors
perceive administration that non-executive directors as effective in monitoring and control of
opportunistic behavior of managers, and thus protect the interests of shareholders (Mangena and
Tauringana, 2007, p 0.75) .
King Code (2002) and the JSE listing rules recommend that the majority of the members of the
board of directors on the board should be independent directors independent of management be
in the interests of shareholders (including minority interests) can be protected. This refers to the
law that King expects that management companies be more independent CG practices be better
than those that have a smaller number of independent directors. However, in the past there have
been a series of corporate scandals in SA marked pattern of weak plates that can not be involved
in the effective oversight of the company's business and failed to ensure that senior officers do
not participate in -dealing self For example, Treasury Bank royal (Hub 0.2004, p. 10). In some
cases, boards have failed to fulfill their responsibilities despite the presence of members of the
Board of Directors and managers who were more independent accountants for example
LeisureNet (Sarra, 2004, p. 7).

In terms of compliance, it can be assumed that the external management may affect compliance
with the best practices of corporate governance principles because of their independent judgment
(Cadbury Report, 1992), and the need to protect its reputation as the administration. Outside
directors may also affect compliance with the principles of best corporate governance practices
in order to improve their ability to work in a competitive and efficient work management
markets. On the contrary, because outside directors are full-time (Bozec, 2005, p.1927), and
spend some time on the supervisory and advisory and leadership to know less of Business
graduate. 145 Activities reverse executives, may not be in a position to influence the compliance
with the best corporate governance practices
Board Size (SBD)
From the perspective of agency theory, larger plates bad, while the good and effective for smaller
boards in improving financial performance (eg, Jensen, 1993, p. 865; Lipton and workshops
0.1992). Jensen (1993) suggest that the preservation of small plates can improve their
performance with respect to the rights of supervision. He believes that large panels tend to focus
on courtesy and politeness in the Board of Directors at the expense of truth and openness. He
believes that when you become a very large joints, exacerbated Agency and the Council of the
problems become more and neglect their duties of supervision and control symbolic. This view is
supported by Beasley (1996) found experimentally that with the increased size of the table,
increases the likelihood of financial statement fraud, which means the need for more vigilance
with larger tables. Lipton and workshops (1992, p. 67) says that like the size of the Board of
Directors exceed a maximum of ten directors and additional costs because they are usually
associated with larger plates slow decision-making is higher than marginal gains for intensive
monitoring of administrative activities.
On the contrary, it is more likely the largest of experience for a group to monitor the
effectiveness of management procedures (Karamanou and Vafeas, 2005) Panel largest. Also, I
found Linck (2008) that companies that have growth opportunities, and high costs associated
with research and development, and the volatility of high social returns with low and less
independent graduate. 141

Plates, while large companies have larger boards and more independent. Less independent panel
is likely to be ineffective in performing its oversight role. As such, the results of this study
indicate that a small piece of advice is not always better. In the same way Coles and others.
(2008), a pilot test and the popular view that the boards of smaller and more independent best.
They argue that certain types of companies are likely to benefit from large panels and boards
with representation more distinct. In particular, they say that the various large companies in all
industries with high leverage is likely to be to advise the highest requirements. It is therefore
likely to benefit from the largest managers of private and external managers who have the
experience and expertise relevant to the plate (Coles et al., 2008, p 0.351) of these companies.
The results agree with these arguments.
In SA, determine the JSE Requirements List (2005), but the minimum number of directors of
listed companies should be four, while the King recommended (2002) report that the Council
must be of the size that allows a variety of knowledge and experience to be effective. A Deutsche
Bank (2002, p 0.12) and the survey focuses on 73 large company found that the painting 5-30
size ranges with an average administration adviser 12. The study also reveals that companies that
have a large number of members of the Council it is the wrong approach because of the
colleagues who large panels tend to adopt.
According to these arguments, it can be assumed that the increased surveillance of small tables
may be associated with a high level of compliance with the principles of best practices for
companies, such as those recommended by the King Code government. Greater scrutiny could
affect the administration to comply with the best practices of corporate governance principles,
because if they do not, the Council may appeal against the failure to do so. Similarly, the larger
(smaller) panel with a wide range of expertise and independent directors (less experienced and
independent directors less), can affect the performance (no effect on compliance) with the best
corporate governance practices because corporate managers can (can not) exercise independent
judgment and have ( not) experience in issues related compliance. contrast collective approach
with large plaques may be associated with a low level of compliance with the principles of best
corporate governance practices when it becomes symbolic of the Commission on surveillance
and control of neglected and duties
1. Introduction

The Board of Directors is responsible for overseeing the administration on behalf of the
shareholders. Theoristsargue agency that in order to protect the interests of shareholders and the
board of directors should assume effectiveoversight role. It is supposed to return on board their
supervisory affected theeffectiveness Council, which in turn is influenced by factors such as the
composition of the management, quality and size ofboard, CEO of the Council of duplication
diversity, culture and contrast information board (Brennan, 2006).
Received the issue of the structure of the Council as a mechanism of corporate governance in
recent years considerableattention academics, market participants and regulators. He still
receives attentionbecause offering views on the impact of the administrative structure to control
offirms theory and performance, and at the same time, the empirical evidence is inconclusive.
Until now, the relationship between boardstructure (as opposed to treatment) operations and the
performance of the company among the most studied allboard Research (Bhagat and Black,
1999) look. In these studies, and it is often assumed that the basis is determined
financialperformance of the company from the standpoint of characteristics.In Governing
Council of the importance attached to the institution of effective governance, and came
Governmentof Federal Nigeria, through its various agencies with different institutional
arrangements investorsof to protect the hard private investment gain unscrupulous / managers of
listed companies management in Nigeria. Theseinstitutional arrangements, produced a "code of
best practices for corporate governance", issued in November 2003. It is proposed that the law of
the company's business must be administered under the supervision of the Board of Directors
and Chief Executive Officer of the company whodelegates other management staff on the daily
management of the affairs of the company. BestPractices code also recommends that the Council
is responsible for appointing qualified management and staff person CEOand others. Board
members, with a wealth of experience, is expected to provide leadershipand directing the affairs
of the company with a high sense of integrity and commitment to the company, its business plans
andlong shareholder value in the long. Moreover, the Council provides other control functions.
Other governance mechanisms Ofcorporate of the Audit Committee and the rights and privileges
of shareholders. Appearance Mega was brought unification banksin to the Central Bank of
Nigeria to issue a new law for the governancewhich companies entered into force in 2006. In the
same vein, the Securities and Exchange Commission in Nigeria published (SEC) in the new law
of corporate governance in September 2009 after consultations with otherregulatory devices. A

new law to address the weaknesses in the 2003 law and improve the enforceability
theMechanism. The dismissal of director Ofthe that President Executive Director is required. In
addition, the code recommends that the number of board members is the executive should be
more willing executives are subject to the Board of the maximum size of twenty (20)
management. For toensure all of continuity and inject new ideas, must be non-executive directors
do not remain on the formore Council of the three states of the four (4) years each, ten twelve
adopted (12) years.The study the definition of the structure of the Council presented by the
trickier (1994) . He pointed out that structuredistinguishes table between managers in positions
of responsibility in the company and they do not.Those management positions with well-known
as insider trading managers in the United States or the United Kingdom Executive directorsin
and Australia. The person at the top of the board is the president. It would have been off the
executive or executive of the company. If the CEO has become a director on the board, then he is
the Executive director.In this study, focused on the four attributes table: composition of the
Board, the ownership of the members of the Board of Directors and the Council of CEOduality
any size are considered possibly have an impact on the performance of companies andthese is set
variables properties independent.
Over the years, different variables used to measure the performance of companies. You can
measure the performance of companies using financial market measures of long-term
performance and other performance measures that are policy or short-term market-oriented
measures. Examples of such measures added market value include (MVA), economic value
added (EVA), and the growth of cash flow, earnings per share (EPS) growth, asset growth, and
profit growth, and sales growth (Coles, McWilliams enact 0.2001 ; Abdullah, 2004). In their
study, DeHaan, De Vuyst and Ooghe (2001) used the return on equity and return on assets
(ROA) as alternatives Corporat performance of Belgian companies. Been using the market to
book ratio in Hong Kong companies (Chen Chong, Stouraitis Wong, 2005). In his article, and the
judge, and Koutzevoi Naoumova (2003) use a number of indicators, including financial
performance, customer satisfaction, and the quality of the product / service, and capacity
utilization and processing

2.1 Board Composition and Corporate Financial Performance

Council composition refers to the number of independent non-executive directors of the Council
on the directive TotalNumber. The definition of an independent director is a non-executive
independent director with the company noaffiliation but his directorship (Clifford and Evans,
1997). There apparentpresumption that along with large external administration make different,
and perhaps the best decisions thanboards dominated by insiders. Fama and Jensen (1983)
suggest that the non-executive directors can play animportant role in the effective solution to the
problems of the agency and their presence on the board could lead to a decision moreeffective
decisions. However, the mixed results of the pilot studies. There are a number of studies,
fromaround the world, indicates that the non-executive directors have been effective in
controlling interests of shareholders andprotecting managers, resulting in a positive impact on
performance, and return on shareholders' equity, creditratings, auditing, etc. Dehaeneet God.
(2001) found that the proportion of outside directors positively linked to performance inthe
Belgian companies. I found Connelly and Limpaphayom (2004) that the composition of the
Council has positiverelation with profitability and adversely affect the risk-taking behavior life
insurance companies in Thailand. Rosenstein and Wyatt (1990) found price reaction declaration
of affirmative action theappointment additional external director, which means that the
proportion of outside directors wealth affectsshareholders. Is set Bhojraj and Sengupta (2003)
and Ashbaugh-Skaife, Collins and Kenny (2006) also findthat companies with the highest
proportion of independent directors on the Board of temperatures above link andcredit
respectively. Moreover, I looked O 'Sullivan (2000), a sample of the transfer of 402 UK
companiesand indicate that non-executive directors to encourage more intensive audits in
addition to his role ownmonitoring while expected to reduce agency costs. However, there are
also a lot of studiesthat tend not to support this positive outlook. Some negative reported
statistically significantrelationship with Q Tobin (for example, Agrawal and Knoeber, 1996;
Yermack, 1996), while others do not significantrelationship between performance accounting and
the proportion of non-executive directors metrics (egVafeas and Teodoro, 1998; Weir, Laing and
McKnight 0.2002 ; Hanifa and Hdaib 0.2006). In addition, basedon a survey of companies with
non-executive directors in the Netherlands, Hooghiemstra and Van Manen (2004) conclude that
the stakeholders are not generally satisfied with the way in which non-executive work.
Summarize others Haniffaet (2006) a number of views expressed in the literature that can not
justify this positive relationship, suchas high proportion of non-executive directors can sweep the

excessive company's control, either because the companies harmfulto can suppress strategic
business, and lack of true independence, and lack to business skills for effective betruly
(Baysinger and Butler, 1985; Patton and Baker, 1987; Demb and Neubauer, 1992; Goodstein,
Gautum and Boeker, 1994).
2.2 size of the Board of Directors and the financial performance of companies
This is a crucial feature of the composition of the Council. Big-boards can provide help
companies diversitythat secure vital resources and the reduction of non-environmental
uncertainty (Pfeffer 0.1987; Pearce and Zahra, 1992;. Goodstein et al., 1994). But as Yermack
(1996) refers to the coordination and communication problems anddecision making it
increasingly difficult business performance when increases.Thus, is included as an additional
member in the table, there is a possibility to balance the number of managers between diversity
and coordination. Jensen (1993) seems to support workshops and Lipton (1992) recommends
that a number of Council membersbetween seven and eight. However, the recommendations of
the panel size tend to be specific to the industry and andMehran Adams (2003) that the bank
holding companies have a painting size is much larger than those ofmanufacturing review
firms.A of empirical evidence on the effect of the size of the Council's performance shows mixed
results. Dehaeneetal. (2001) found that the size of the plate positively associated with the
company's performance. However, the results Haniffaet God. (2006) is crucial. Using a measure
of the performance of the market rate of return, and suggest their findings that a large plate
isseen they are less effective in the implementation of the monitoring, but when used accounting
returns, large plates seem toprovide companies with diversity in the names, experience and
knowledge to improve performance. Yermack (1996) found an inverse relationship between the
size of the painting and the value of the company. Additional financial ratiosrelated to
profitability and operational efficiency also seem to decrease with increasing the size of the
Board of Directors. Finally, andLimpaphayom Connelly (2004), we find that the size of the
Board of Directors nothing to do with the company's performance
Board Size
It is often said that the limited size of the Council to improve business performance on the basis
of wholesale profits expanded administrative body Note to exceed poorercorrespondence and

decision-making of the largest [group Lipton and Lorsch, (1992); Jensen, (1983)]. He Claylor
and Brown (2004) to that letter, which indicates that the organizations with the Council of
sizesbetween 6 and 15 are more benefits and increase the value of total net sizes Council
revenues do withother companies. By the time it was building on the size of the Council, meeting
incrementall Office issued time, causing more problems amongexecutives agency executive and
internal conflicts. In addition, it is likely to be controlled by the CEO instead of theboard
administrative control large plate. Eisenberg et al., (1998) when creating keep up with the size of
the Board of Directors, increasing the correspondence issues, greater coordination. This logic is
more difficult in noteworthyorganization and expenses.

Council review in this organization is the independent variable. There is a need for independent
directors on the board to control the practice of executives because of severe behavior, and
conduct a review and amendment on board (Jensen in Meckling, 1976). areconsidered
independent directors "in the decision-specialists" (Fama, 1983). Non-executive directors may
reduce managerialutilization. Chief Administrative not an agent working environment in the
organization and external stakeholders. As evidenced by the trickier (1984), gives non-executive
directors meeting "extrawindows in the world," according to the law of Pakistan for Corporate
Governance (2002) ofexecutives sheets must be to extend the CIO should not exceed 75%

A joked widely on the issue of corporate governance is whether two of the most important
positions in the Organization of chairman of the board and general manager should be held by
individuals twoseparate (dual power structure) or any individual can be referred Mahfeztin (one
unitary authority structure).
Many studies tend CEO performance ratio to bilateral; with conflictingresults (K.Boyd, 1994).
Not only influences the development of the following alternative components that may affect the
performance.Berg Smith and double confirm the duplication termperformance long, Control
(1978) assumed that there was a possibility of organizing a search for CEOperforms when you

double portion. Thus, the division of the two positions shareholderesteem improvement. Glory
(1983) also argued that the focus of administrative decisions and decisioncontrol in the
individual reduces the suitability of the table in the senior management control. Case Inpoint,
when the CEO of these results doubles as Chairman of the Board, in a state of shock and
amusement growsagency costs.

May lose a ton of the relationship between corporate governance and performance of the
company's studies, which show how large management practices financialquality business
expansion, high gain and low risk of systemic risk (Schleifer, 1997; John, K. & LWSenbet, 1998
Harmilalin, B., and Fayzbach 0.2003). Experimental research of Mitton (2001), which takes 398
firmincorporate Philippines, for example Korea, Malaysia, Indonesia ,,
Thailand has found that the business level contrasts are identified with the corporate governance
variables have a strong impact on the company's performance in the midst of the crisis in East
Asia in 1998. 1997 also recommends that the best implementation of the value of theresults are
in touch with companies that have signs higherdisclosure quality, and the approach is superior
also focus ownership instead of enhanced.Fich and Shivdasani, (2004) found that organizations
with opportunityarrangements executive investment has a higher market to book ratio, and
increase profitability and positivesecurities report in response to the change in the determination
of corporate plans investment opportunity for executives.The study Ashraf Ghani and (2005)
noted the launch of and codes of conduct and accounting advancementof and exhibitions in
Pakistan and the variables that affect them. Theyreport ensure that the lack of investment, lack of
legal competence and weak enforcement and systemsare key variables that are social elements to
clarify the status of representing inPakistan. They assume that these are the system requirements
that are vital to improve ofaccounting quality standards in the emerging economies. No Porta,
Lopez de Silanes, Shleifer and Vishna (1999 says that the safety of the investor has a tendency to
be more pronounced when legitimateenvironment stronger, and therefore their willingness to
contribute has a tendency to increment.They find a positive affiliation strong between
governance and corporate performance.

Drobetz, Schillhofer, and Zimmerman (2004) found a positive correlation between corporate
governance and firm performance German public companies. Aggarwal et al. (2008) determines
thenumber of management features include access to all the information yearperception fixed,
and then characterize as characterized List Management launched aspecific rate regulation.
Adjaoud et al. (2007) used the order in 2002 to consider therelationship between the performance
of the company and dozens of government. The researchers found that therelationship was most
definitely not a statistically significant differences between grades and performance measures
accountingbased (for example, ROI, return on equity, EPS, and books business), while
therelationship between the degrees are further measures to make the value (including, for
example, businessquality increase the quality of listed financial) Overall it was great.
Council structure has been adopted heavily on the concept of the agency, with a focus on the
ability to control the board. Agency theory handle the organization and a link to the agreement by
the members of the whichdifferent run together (Jensen in Meckling, 1976). Since resources are
theProperty shareholders, and can be created major problem agent for reasons thatadministrators
need to make a decision on options for using these advantages.Introducing lucrative
administrative body can be a powerful tool to control the main supervisors andadapting this
issue, and to reduce costs Agency (Fama, 1983) . As a result, the Agency isutilized theory to
analyze the role that could be played by the administration in helping to theassociations
performance management (Jackling, 2009). Moreover, the problem of agency in the less
fundamental in the family business environment with possession of highly concentrated show,
because controlling shareholders be a driving force, and the power and control enough data from
the main supervisors (Jensen and in Meckling, 1976) .Tombs (2002) shows that there
Classifications distinct from the House of Representatives them into three categories
hepositioned School reflections about the style of government. Firstly representatives see that
part of the white workers who run the game and assuming responsibility and accept the useful
side. Workers accept that second school of thought on the principles and rules make management
workers. Representatives concern among third school of thought accept that workers who are
represented by part inept mostly to use and generally adopt a holistic approach
Board size is the number of members of the Board of Directors. Determine the appropriate size
of the painting affects their ability to work effectively been the subject of ongoing debate (Jensen

1993; Yermack, 1996; Dalton, newspapers, and Johnson & Ellstrand, 1999; Hermalin and
Fayzbach 0.2003). Some scientists believe some of the smaller tables (for example, Lipton and
workshops, 1992; Jensen 1993; Yermack, 1996). Lipton and workshops (1992) support tablets,
suggesting that large groups facing social problems of laziness and parasitism. As a result of a
general increase in the volume of free riding increases efficiency and reduces the Board of
Directors. It supported Jensen (1993) pill because of the efficiency in the decision-making
process, due to higher coordinationand minor communication problems. Consistent with this
idea, Yermack (1996) and Eisenberg, Sundgren, Wales (1998) provide evidence that smaller
boardsare associated increase the company's value. It is believed large tables to be associated
withproblems communication, cohesion and the development of factions and conflict (O'Reilly,
Caldwell and Barnett, 1989). Commission Blue Ribbon (NACD, 1995) opinedthat must be a
small plate enough to discuss in-depth, but big enough to take a wide range of issues in meetings
table.Large apartment was on the floor, which would provide greatermonitoring and advice
(Pfeffer 0.1972; Klein, 1998; Adam & Mehran, 2003; Anderson, Muncie and Reap, 2004; Coles,
Daniel and Naveen 0.2008). For example, Klein (1998) says that the need for a Chief Executive
Officer of the Board will increase with the complexity of organisation.Diversified companies and
those operating in multiple sectors require more foradvice need (Hermalin and Fayzbach, 1988;
Yermack, 1996). However, Singh found and Harianto (1989) that large panels to improve
performance by reducing board board domination within CEO, making it difficult to adopt might
not shielding contracts of interest to shareholders.
The board size is associated with the size of the company. For example, Yermack
(1996) and Coles and others. (2008) found that the largest and most diversified companies with
the largest number of directors on the board. Bonn, golf, Karpoff and Raheja (2007) found that
also become companies larger and more diverse, and increasing the size of the painting; but there
areother variables such as managerial ownership, and the age of the company, and business
sectors, and the mechanism of takeoverdefence and others that affect the size of the board.
Firmsrequire tables more complex because of the greater difficulty of the task of supervision and
communication problems compensation thecoordination identified by Jensen (1993) and Lipton
andLorsch (1993). Chaganti and others. (1985) found that, compared with companies in

bankruptcy, nonbankruptfirms has the largest scales, suggesting that large plates help
firmsurvival.
Another branch of literature, from the perspective of resource dependence indicates that the
panels are selected to maximize the contribution of the important resources of the company
(Pfeffer 0.1972; Pfeffer and Salancik, 1978, Klein, 1998; Hillman and Dalziel, 2003). Klein
(1998), for example, indicates that the counseling needs of senior executives with a high degree
inthe company dependent on the environment for resources. Thus, increasing the size of the
painting theorganisation connect the external environment and to ensure that vital resources.
Toresource response agencies and regulatory pressures, organizations create great toencompass
board members from different backgrounds (Pfeffer 1972; Pearce and Zahra, 1992).
I found Lipton and workshops (1992) and Jensen (1993) that when the panels expand after seven
or eight people, are less prone to control management effective and easier to control the CEO.
Workshops (1997) suggest that the members of the Board of Directors size 12 to lead the
discussion of the most effective, while allowing for staffing committees. As of the table can be
seen from the above discussion, the literature shows mixed results. Some supporting tablets (for
example Yermack, 1996 ;. Eisenberg, et al., 1998) and large boards others supporting (Harianto
and Singh, 1989; Adam and Mehran 2003). Few studies do does not provide any support for the
relationship between the composition of the Board and firmperformance (Hermalin and
Weisback, 1991; Bhagat and Black, 1999)