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The regulators and financial market participants desire to have an effective corporate governance in place. However, researchers have not yet found a corporate governance model that is universally agreed upon and recognized. Numerous variables have been used by the researchers as proxies for the components of corporate governance. Again, there is no agreement among the researchers as to the number of variables and their impacts on the performance of the companies. The unavailability of a strong corporate governance model is even more problematic for a developing country such as Pakistan where corporate governance is relatively a new phenomenon.
The objective of this study is to find out whether ROA and ROE speak. In other words, the objective of the study is to find out the impact of board composition on the performance of a public limited company. This study employs a new perspective to examining the quality of a board composition in terms of its impact on corporate performance by taking into account the financial management acumen and expertise (a value creating function) of the top management. Also, another variable, female representation has been employed as an independent variable to see whether it has any role in improving the corporate governance of a firm. It was concluded that ROA and ROE do speak to let the stakeholders know about the quality of corporate governance practices. These metrics, ROA and ROE, were found to play the role of representing corporate governance effectively as they spoke up resoundingly where it mattered. Especially, they spoke up to tell that the boards size, management ownership, female representation, and boards independence, all have influence on the performance of a firm. Specifically, the influence of the management ownership seems very strong, the impact of board size on the firm performance is found negative, the influence of independent directors is noticeable as well, and the new variable, female representation, is influential as well.