2. Kader Sahin
Department of Business
Administration, Karadeniz
Technical University, Trabzon,
Turkey.
Cigdem Sahin Basfirinci and Aygun Ozsalih
Public Relations and
Advertising Department,
Karadeniz Technical University,
Trabzon, Turkey.

3. • This study attempts to explain relationship between principles
of good governance, marketing practices and financial
performances of companies in Turkey.
• Globalization, competing interest among internal i.e.
management and external stakeholders i.e. customers,
suppliers
• Caused the need for decision maker not only increase their
financial performance but also satisfy increasing expectations of
customers, suppliers and society as a whole.
• Lack of clarity about aforementioned interrelations due to
– Most research based on board composition and financial performance
– Few non-US empirical studies

4. • To examines the inter-relationships between
board composition characteristics, CSR
practices and financial performance in this
study.

5. PARTI
Conceptual
Framework
, Hypothesis
and Research
Model
PARTII
Research
Methodology
PARTIII
Findings and
Implications

6. Board Composition
•Board Size
•Proportion of independent
board members
•Proportion of inside board
members
•Existence of CEO Duality
•Existence of audit (H1) or /and
corporate governance (H2) Corporate Social
Responsibility Performance
•Corporate Social
Responsibility Index
Financial Performances
•Net Return of Assets
•Net return on Equity
•Return on Sales
•Debt Ratio
•TOBIN’S Q
H1
H2
H3
Figure 1. The Research Model
CONCEPTUAL FRAMEWORK

7. H1a
• Smaller board size leads to better financial performance
H1b
• A higher proportion of independent board member leads to better
financial performance
H1c
• A higher proportion of inside board members lead to worse financial
performance
H1d
• Existence of CEO duality leads to worse financial performance
H1e
• The existence of an audit committee leads to better financial
performance

8. H2a
• Large board size leads to better corporate social performance
H2b
• A higher proportion of independent board members lead to better corporate
social responsibility
H2c
• A higher proportion of independent board members lead to better CSP
H2d
• Existence of CEO duality leads to worse financial performance
H2e
• The existence of a corporate governance committee leads to better corporate
social performance
H2f
• The existence of an audit committee leads to better corporate social
performance

9. H3a
• Improved CSR leads to better financial
performance
H3b
• Better financial performance leads to
improved CSR

10. • This research uses 165 firms that were listed in the
Istanbul Stock Exchange (ISE)
• There are two primary sources of data:
– companies’ financial statements and
– corporate Governance Principles Compliance Reports.
• Data of the financial performance of the companies were
obtained from two main financial statements:
• balance sheet and income statements.
• Compliance reports were used to obtain both board
structure and corporate social responsibility data.
SAMPLE SELECTION
AND DATA ANALYSIS

11. Statistic Observation Mean Median Std. deviation Min. Max.
CSP 165 0.4400 0.5000 0.25490 0.00 1.00
CONCENT1 165 0.5140 0.5100 0.22754 0.00 0.98
CONCENT2 129 0.1892 0.1540 0.18014 0.00 1.00
CONCENT3 100 0.2145 0.0605 0.535591 0.00 4.82
FREELOAT 163 0.3237 0.3072 0.18358 0.00 0.91
ROA 162 0.0506 0.0524 0.13910 -0.84 0.49
ROE 160 0.0335 0.1001 0.45093 -3.90 0.54
TOBINQ 163 4.1276 0.8322 39.05392 0.11 499.43
ROS 160 0.2493 0.0457 2.51969 -1.53 31.79
DEBT 162 0.4608 0.4054 0.33990 0.02 3.47
BOARDSIZE 165 6.4970 7.0000 1.91790 3.00 12.00
CEODUAL 165 0.2061 0.0000 0.40571 0.00 1.00
NDEPDIR 165 0.0640 0.0000 0.13691 0.00 0.78
INDIR 165 0.2345 0.1667 0.25097 0.00 1.00
AUDITCOM 165 0.9333 1.0000 0.25020 0.00 1.00
GOVERNCO
M
165 0.2303 0.0000 0.42231 0.00 1.00
SECTOR 165 0.7636 1.0000 0.42614 0.00 1.00
Table1.DescriptiveStatistics

17. • Significant impact of board composition on corporate
financial and social responsibility performance.
• Board size, proportion of inside board members and
existence of duality has partial relationship with the
financial performance, whereas, proportion
independent director and existence of audit committee
do not support the financial performance.
• Board size, inside board members, existence of duality
and existence of corporate governance does not
support the hypothesis with the relationship with CSP.
• Improved CSR does not lead to better financial
performance whereas better financial performance
leads improved CSR.

18. • Sample size is small.
• Moreover, using content analysis the authors utilized
categorical data derived from published corporate
governance reports, since there is no continuous data or
corporate social responsibility and some board composition
characteristics in Turkey.
• The difficulty of obtaining previous years’ data and the
categorical nature of the data has restricted the study in
terms of overcoming the endogeneity problem as well as
the statistical analysis selection process.
• Disclosure in annual reports should not be regarded as a
complete measure of corporate involvement in social
activities.

19. • This research helps to show the importance of
Corporate Social Responsibility performance
(CSP) in the corporate governance.
• Helpful for the organization to determine the
board size, independent director, CEO
duality, the proportion of inside board
members, and existence of audit committee
to implement the proper CG in an
organization.