THE IMPACT OF BOARD OF DIRECTORS CHARACTERISTICS AND OWNERSHIP STRUCTURE ON FINANCIAL SUSTAINABILITY: EMPIRICAL EVIDENCE FROM PALESTINE AND AMMAN EXCHANGE
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Date
2025-09-17
Authors
Amneh Omar Ibrahim Hardan
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Publisher
جامعة النجاح الوطنية
Abstract
This study explores the relationship between board characteristics, ownership structure, and financial sustainability measured by Return on Assets (ROA) and Operational Self-Sufficiency (OSS), The research methodology employs panel data analysis using secondary data. The statistical analysis was conducted using the Pooled Ordinary Least Squares (OLS) regression method, the final sample for the study was selected from companies listed on the stock exchanges in Palestine and Jordan, the total number of the sample reached 113 companies distributed over non-financial companies. The findings show that the gender diversity has a positive impact on both ROA and OSS, this points to the importance of diverse perspectives in achieving long-term sustainability. However, board size and CEO duality don’t have a significant effect, these results suggest that increasing the size of boards or combining the roles of CEO and chairman may not have an impact on financial results, the striking result is that the frequency of board meetings had mixed results: While it led to increased short-term profitability (ROA), it negatively impacted long-term sustainability (OSS).
Board independence has a negative impact on OSS but has no effect on ROA, multiple board memberships and effective board committees were found to enhance both ROA and OSSas they bring diverse expertise and strengthen governance practices.
Regarding ownership structure, Concentration ownership improved profitability (ROA) but had no significant impact on OSS, that means a focus on short-term gains over long-term sustainability. Foreign ownership has a positive impact on OSS but not ROA but is not significant, while institutional ownership showed no significant effects on ROA but has a significant negative impact on OSS, this may reflect different trends among institutional investors.
These findings underscore the importance of a balanced governance approach, where diversity, expertise, and effective oversight are prioritized to achieve both financial performance and sustainability. Companies should focus on enhancing gender diversity and encouraging multiple board memberships while carefully managing board independence and meeting frequency to avoid inefficiencies.