The performance consequences of board structure changes: Evidence from Ghana

This paper analyses the performance consequences of board structure changes in Ghana for the study period 2000 to 2009. In 2003, the Ghanaian listed firms adopted the Ghanaian Corporate Governance Code on comply or explain basis but no study to date has analysed the pre-2003 and post-2003 board structure changes impact on firm performance in the Ghanaian environment. We predict that board structure changes prompted by the introduction of the Ghanaian Code in 2003 should lead to better firm performance. Using a panel regression model, our results show that duality decreases firm performance pre-2003, but those firms that separate the two posts in line with the recommendations of the Ghanaian Code did not perform better than those that combined the two post-2003. While we find no relationship between board committees and firm performance pre-2003, the relationship switched to positive and statistically significant post-2003. The most consistent result we find concerns board size. However, the non-executive director representation on the board appears to have no impact on firm performance. These results show that not all board structure recommendations introduced by the Ghanaian Code are effective in achieving superior performance in Ghana.