Impact of expertise of audit committee chair and nomination committee chair on financial performance of firm

• Published in: Corporate governance (Bradford) 2020-05, Vol.20 (4), p.621-638
• Main Authors: Chaudhry, Naveed Iqbal, Roomi, Muhammad Azam, Aftab, Iqra
• Format: Article
• Language: English
• Subjects: Audits; Chief executive officers; Committees; Corporate governance; Financial reporting; International business; Nominations; Quality; Stockholders
• ISSN: 1472-0701; 1758-6054
• DOI: 10.1108/CG-01-2020-0017

Purpose The purpose of this paper is to analyze the influence of financial, monitoring and experiential expertise of audit committee chair (ACC) and HR, monitoring and experiential expertise of nomination committee chair (NCC) on the financial performance (FP) of the firm. Design/methodology/approach Quantitative approach was used in this study to collect data from 50 non-financial firms of Pakistan and to analyze the data through e-views for testing hypotheses. Findings The findings revealed that financial and monitoring expertise of ACC and experiential expertise of NCC positively influence return on assets, return on equity and the net profit margin of the firm. However, no significant influence of experiential expertise of ACC and monitoring and HR expertise of NCC on FP was found. Research limitations/implications The findings of this study will help firms of Pakistan to understand what expertise of their ACC and NCC can contribute to the enhancement of their FP. However, the current study examined the non-financial firms of Pakistan only. Originality/value Past studies have never shown the particular focus on different types of expertise of “Chairs” of nomination and audit committees in a combined research to analyze their impact on FP of firms. The present study has abridged this gap in the field of expertise of chairs of board committees so, it will open new areas of discussion for future researchers in domains of “agency theory”, “human capital theory” and corporate governance.