The effect of international experts on company financial performance

Abstract

Objective: The article aims to evaluate the influence of international supervisory board experts on firm financial performance, based on the impact of international experts’ characteristics, such as their knowledge, experience, independence, and connections. Methodology/research approach: The empirical study is based on a unique handcollected dataset covering a final sample of 256 companies listed on the Warsaw Stock Exchange (WSE) and which operated on the market during the observation period 2010- 2015. The Generalized Least Squares (GLS) regression model with a random effect is employed to test the hypotheses. Findings: The findings strongly suggest that the presence of supervisory board members with an outside perspective and international experience may exert a positive impact on companies’ operational outcomes. Research limitations/implications: The research has practical implications for Polish governmental agencies, as it verifies the usefulness of the recommendations for supervisory board composition presented in the Best Practices for WSE Listed Companies. Originality/value: The study contributes to the existing literature on the factors that affect company performance. Consequently, great value is added to the research on supervisory board characteristics that are crucial for effective monitoring and advisory roles, enhancing the quality of corporate governance.