Board Dynamics in Corporate Governance: Odd Board Structure and Firm Performance

Purpose: Corporate governance plays an important role in improving firm performance through effective board oversight and decision-making. Board characteristics such as gender diversity, independence, size, and meetings influence firm performance. Recently, odd board structure has gained attention due to its role in facilitating efficient decisions. The aim of this study is to examine the impact of board characteristics on firm performance and the moderating role of odd board structure among non-financial firms listed on the Pakistan Stock Exchange from 2012 to 2024. Design/Methodology/Approach: Agency theory and signaling theory were used in this study. Quantitative panel data of 100 non-financial firms listed on the Pakistan Stock Exchange were analyzed using the Generalized Method of Moments (GMM). Firm performance was measured using return on assets (ROA) and return on equity (ROE). Findings: The results revealed that gender diversity and board independence have a positive and significant relationship with firm performance measured by ROE. The odd board structure significantly moderates this relationship. Board size and board meetings showed insignificant direct effects, but their interaction with odd board structure has a positive and significant effect on ROA. Implications/Originality/Value: It is concluded that odd board structure enhances board effectiveness and firm performance. The findings suggest that the Securities and Exchange Commission of Pakistan (SECP) should emphasize maintaining an odd number of board members to improve decision-making efficiency.