The nexus of board leadership and financial performance: the moderating effect of board size

This paper investigates the impact of leadership structure on the firm performance of selected Indian companies listed on the National Stock Exchange. The moderating effect of board size has also been studied to gain insight into its potential intricate relationship in this regard. The study covers a sample selection of non-financial companies listed on the National Stock Exchange (S&P NSE 100) for twelve consecutive years, commencing from 2013 to 2024. Hierarchical regression analysis was applied to examine the potential effect of board leadership structure (CEO duality) and the moderating effect of board size on accounting and market-based measures of firm performance. CEO duality has a positive impact on Return on Assets, but there is no impact on Tobin’s Q. Furthermore, the empirical results show that board size is a relevant moderator for the association between leadership structure and firm accounting-based performance measurement. The study shows that board size weakens the initial relationship between CEO duality and ROA. Based on the findings, the study suggests that minimising board size and avoiding joint leadership structures can enhance governance efficiency and reduce coordination costs.