BOARD COMMITTEES’ EFFECTIVENESS AND FIRM PERFORMANCE: EVIDENCE FROM JORDAN

Abstract

This study offers a conceptual framework for comprehending how the audit committee (AC), risk management committee (RMC), and nomination and remuneration committee (NRC) affect a firm's performance. 68 non-financial public firms that were listed on the Amman Stock Exchange between 2017 and 2020 will form up the research sample. The success of the company will also be evaluated using Tobin's Q and ROA. On the other hand, data on NRC, RMC, and AC will be manually collected from annual reports. Four alternative statistical models—fixed effects, random effects, pooled OLS, and robust standard errors—will be used in the study to assess the panel data. This analysis anticipates that the business performance will be positively impacted by nomination and remuneration committee effectiveness (NRCEF), risk management committee effectiveness (RMCEF), and audit committee effectiveness (ACEF). By analysing the relationship between NRCE, RMCEF, ACEFR, and business performance, this study closes a gap in the literature. Prior research on the subject in Jordan has been overlooked. Because the corporate environment in developing nations is similar, the findings of this study can be somewhat applied to such countries. Additionally, since specific NRC and RMC criteria were added to the corporate governance rules in 2017, this study is the first to be carried out in Jordan.