Board composition and company performance in the South African real estate sector

Abstract

The drive behind a study of this nature was to provide an examination of the key elements that impact on company performance within the South African real estate investment sector is presented. Specific attention is paid to board size, age of the CEO, gender representation and the proportion of independent directors. A total of 33 publicly listed real estate investment firms on the Johannesburg Stock Exchange were studied. A quantitative analysis was carried out in order to determine the impact that certain dependent variables had on the performance of the company. Company performance was measured by the return on assets (ROA).

The research finds that board size is significantly negatively correlated to the firms' performance, which is line with similar international research. The paper also found that the percentage of independent directors serving on a board is positively correlated to its ROA.

Lastly, a comparison to other similar international studies is discussed in order to better contextualise the findings of this paper. The academic and real-world impact of the results is also examined.