Journal of Applied Finance & Banking

The Impact of Board Size, CEO Duality, and Corporate Liquidity on the Profitability of Canadian Service Firms

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• Abstract

  The purpose of this study is to examine the impact of board size, the CEO (Chief Executive Officer) duality, and corporate liquidity on the profitability of Canadian service firms. This study also seeks to extend the findings of Kajola [1] and Gill [2]. A sample of 75 Canadian service firms listed on Toronto Stock Exchange (TSX) for a period of 3 years (from 2008-2010) was selected. This study applied co-relational and non-experimental research design. The results indicate that larger board size (large number of directors) negatively impact on the profitability of Canadian service firms. The findings of this paper also show that the CEO duality and corporate liquidity positively impact the profitability of Canadian service firms. In addition, firm size and firm growth positively impact the profitability of Canadian service firms. This study contributes to the literature on the factors that affect firm’s profitability. The findings may be useful for the financial managers, investors, and financial management consultants.