Abstract

On the subject of the effects of the Board of Directors on the performance of the company, written articles have generally been limited to listed companies. The effects of the Board of Directors and their respective structure on the performance of the company consist of a subject matter that has been frequently researched in the literature by means of various different methods. In this particular study, the existence of the Board of Directors in SME’s and, if present, the effects of these in the performance of the company have been researched. In this context, a field research has been conducted with the search model by means of a simple random sampling. In addition, a poll has been performed on a one on one basis comprising a total of 703 voluntary companies that have a status of Small and Medium Sized Enterprises (SME) from several cities around Turkey, of which 204 operate in manufacturing, 347 in service and 152 both in manufacturing and service. The resulting data has been put together and analyzed. On the other hand, the poll that has been applied to the companies is composed of four sections, which consist of the complementary statistics, the decision making and resource generating capacity of the board of directors, the authority of the board of directors over the management processes and, lastly, the performance of the company.

As a result of the study, it has been observed that the companies with a board of directors in SME’s demonstrate a higher performance when compared to the companies without a board of directors. Furthermore, the education levels of the members that take part in a board of directors have a positive effect on the performance, whereas the companies with a board of directors that have elected their chief executive officer have a positive effect on the performance of the company which is significantly higher than that of the board of directors where the president is nominated in accordance with the amount of shares that a member holds. Moreover, it has been proven that the structure and characteristics of a board of directors affect the performance of the company in a positive manner.

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