Abstract:

This study aims to examine the relationship between the representative costs of 18 manufacturing industry companies included in the BIST Corporate Management Index between 2006-2016 and the management board structure. The representative costs are represented by the percentage of free cash flows and growth opportunities, while the size of the board of directors, the number of independent members and the CEO’s binary are determined as variables related to the board structure. According to the empirical findings, the reverse relationship between the size of the board and the representative costs, the number of independent members and the representative costs, has been found a positive relationship. However, there has not been a meaningful relationship between the CEO’s duality and representative costs, which expresses the difference between management and ownership. The results showed that the management board structure had a significant impact on representative costs.

Abstract:

In this study, it is aimed to reveal the relationship between the agency cost and board structure of 18 manufacturing industry within the BİST corporate governance index firms between 2006 and 2016. Agency cost is represented with free cash flow and growth opportunity ratio, the board size, number of independent members and CEO duality are represented board structure. According to the empirical results, there is a negative relationship between the board size and agency costs, a positive relationship between the number of independent members and agency costs. However, there is no significant relationship between the CEO duality and the agency costs. The results revealed that the board structure has a significant impact on firms’ agency costs

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