Board Characteristics and Their Impact on Financial Sustainability An Applied Study on a Sample of Companies Listed on the Iraq Stock Exchange

Abstract

This study aims to investigate the role of board characteristics in achieving financial sustainability for firms listed on the Iraq Stock Exchange, as well as to evaluate and analyze the effects of board size, board independence, gender diversity, director duality, and the frequency of board meetings on these firms’ financial sustainability. To achieve the research objectives, a main hypothesis was formulated to test the relationships among the study variables within the empirical framework. A quantitative, application oriented methodology was adopted, relying on mathematical evaluation and analysis. Annual financial statements of the listed companies and the Exchange’s official bulletins for the period 2014–2023 served as data sources. The study sample comprised nineteen companies listed on the Iraq Stock Exchange. A set of quantitative measures was employed to capture board characteristics, while the DuPont model was used to assess corporate financial sustainability. The findings reveal a positive and statistically significant impact of board size and director duality, a negative and statistically significant impact of board gender diversity, and no significant effects of board independence or meeting frequency on financial sustainability. Among the key recommendations is to reorganize the board structure by increasing its size and leveraging director duality as mechanisms to enhance financial sustainability, while adopting targeted gender diversity policies to mitigate its adverse effects.