The Impact of Board of Directors and Audit Committees on Stock Return of Jordanian Financial Companies

Abdel-Razeq A. Azzoz, Basheer A. Khamees

Abstract


This study examines the impact of Board of Directors and Audit Committee on stock returns. The Fama and French Three Factor model is used to estimate the stock return. Also, the board of directors and the audit committee are used to measure the corporate governance mechanisms. This study applies fundamental analysis on the financial Jordanian companies' listed on the Amman Stock Exchange (ASE) over the period 2007 to 2012. The results revealed that there is a statistical relationship between stock return and each of the board of directors and the audit committee. The researchers recommend the financial Jordanian companies to reduce the number of board of director’s members, to adjust the proportion of the external directors and non-executive in each of the board of director and the audit committee.

Keywords


حوكمة الشركات, عائد السهم, مجلس الادارة, لجنة التدقيق.

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