The Impact of Corporate Ownership Structure and Characteristics of the Board of Directors on Profitability of TSE Companies

Shahriar Faghekarimi ¹ Mohammad Taghi Taghavifard ²

1 ) phd student of accounting, islamic azad university, science and research branch
2 ) allameh tabataba i university of managment,iran

Publication : International Conference On modern Researchs in Management, Economics and Accounting(1meaconf.com)
Abstract :
By making an investment, gaining benefit and increasing their wealth is the first objective that investors seek. Based on economy logic, any investor who makes an investment in assets with indefinite return expects higher return rate than that of investments with determined benefit. Investors expect that investing in firms is more profitable than assets with fixed return. In addition, when performance of a firm is less reliable, expected return of investment is higher. The present study is aimed at surveying effect of structure of ownership and specification of the Board of Directors on profitability of Teheran Stock Exchange companies. Geographical scope of the study was Tehran Stock Exchange. Sampling was carried out through screening in a six years period from 2007 to 2012. The results of linear regression analyses showed that specification of the board had no significant relationship with profitability. This result is not consistent with Agraval and Nober (1996), Coolz et al (2001). Furthermore, surveys showed that among the aspects of ownership structure, concentration of ownership and institutional ownership had positive and significant relationship with profitability; and management and state ownership had no significant relationship with profitability. The positive relationship between concentration of ownership and profitability is consistent with Kapopoles and Zazarito (2007).
Keywords : profitability structure of ownership specification of the board of directors