Mohammed Hassan Makhlouf(1) ,

Nur Hidayah Binti Laili(2) , Mohamad Yazis Ali Basah(3)

(1) Ph.D candidate. (2), (3) Assistant Professor.

Faculty of Economics and Muamalat

Universiti Sains Islam Malaysia (USIM)

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This study aimed to investigate in the relationship between the characteristics of board of directors' as a component of Jordanian Corporate Governance Code (JCGC) and its effect on firms performance.

Examine the role of board of directors in enhancing and improving the firms performance.

2

Good corporate governance helps the firms to

Protect the shareholders interests.

Manage resources.

Attract new investors and capital funds.

Achieve better performance.

3

Board of director's

independence

Board of director's size

Family members at Board of director's

Board of directors meetings

Nominations & Compensation

Committee

Firm Performance

CEO Duality

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Importance of independence.

Independent members in JCGC.

Independent members and firm performance at previous

literature.

H1: There is a positive relationship between independence

of board of directors members and firms' performance.

5

Board of directors' size in JCGC.

Optimal Size (Large or Small)

Board of directors' size and firm performance at previous

literature.

H2: There is a positive relationship between board of

directors' size and firms' performance.

6

Existence of family members at the board of directors and

firm performance at previous literature.

H3: There is a positive relationship between existence of

family members at the board of directors and firms'

performance

7

Board of directors meetings in JCGC.

Board of directors meetings and firm performance at

previous literature.

H4: There is a positive relationship between frequency board meetings and firms' performance.

8

CEO duality in JCGC.

CEO duality and firm performance at previous literature.

(Healthy or not)

H5: There is a positive relationship between CEOs dual and firms' performance.

9

Nominations and Compensation Committee in JCGC.

Existence of Nominations and Compensation Committee

and firm performance at previous literature.

H6: There is a positive relationship between Existence of Nominations and Compensation Committee and firms' performance.

10

According to previous studies, when the firms' commitment with the

characteristics' of board of directors is consider a significant factor to support

and improve the firms' performance. There are some factors supporting this;

Electing the members according to their experience and qualifications.

Should be a clear separation among the positions of CEOs and chairman.

Set of committees should be existence to monitor the firm's business such as

audit committee and nominations and compensations committee.

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CORPORATE GOVERNANCE IN JORDAN?

JCGC issued in 2008.

Came into effect on 1st of January 2009.

Its prepared in view of:

Development of the national economy in Jordan at all levels.

To develop the national capital market and its regulatory and organizational framework.

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