Corporate Governance, Board Characteristics, and Firm Performance: A Review of Empirical Evidence

Abstract

This review synthesizes empirical research on the relationship between corporate governance mechanisms, board characteristics, and firm performance published between 2015 and 2024. From an initial pool of 1,983 records, 102 peer-reviewed articles were selected following structured search and screening procedures. The review examines evidence on board composition (independence, size, diversity), board committees (audit, remuneration, nomination), CEO duality and leadership structure, ownership structure, and their respective effects on financial performance, earnings quality, and firm valuation. The evidence reveals that board independence is positively associated with firm performance in contexts of dispersed ownership but exhibits diminishing or negative returns in concentrated ownership structures where monitoring redundancy arises. Gender diversity on corporate boards demonstrates a consistent positive association with both financial performance and reporting quality, particularly above a critical mass threshold of three or more women directors. CEO duality is consistently negatively associated with performance in developed markets, though the relationship is moderated by firm size and industry dynamism. The review identifies stakeholder-oriented governance, environmental, social, and governance (ESG) integration, and digital governance infrastructure as the most consequential emerging themes. A future research agenda emphasizing dynamic governance processes over static structural characteristics is proposed.