DOI: 10.24818/jamis.2026.02002
Vol. 25, No. 2, pp. 203-230, 2026
© 2026. This work is openly licensed via CC BY 4.0.
Author(s): Mădălina Preda1,a and Alexandra Ștefana
a Doctoral School of Accounting, Bucharest University of Economic Studies, Romania
1 Corresponding author: Mădălina Preda, Doctoral School of Accounting, Bucharest University of Economic Studies, Bucharest, Romania, email addresses: predamadalina17@stud.ase.ro
Keywords: corporate governance, audit committee, gender diversity, financial performance
JEL codes: G34, M42, M41
Abstract
Research Question: What is the influence exerted by the characteristics of the board of directors on financial performance? To what extent do the characteristics of the audit committee contribute to financial performance?
Motivation: In a business environment marked by rapid technological innovation, political instability, and climate challenges, concerns regarding the effectiveness of corporate governance mechanisms and their impact on companies’ financial performance have intensified. These events have highlighted the need to strengthen oversight and control structures to manage risks more effectively and protect investors’ interests. In this context, the effectiveness of the Board of Directors—assessed in terms of its size, independence, and the presence of non-executive members—represents the first line of defense in protecting investor interests and underpinning strategic decisions. At the same time, strengthening internal audit is essential for ensuring transparency and managing emerging risks. Consequently, corporate governance plays a vital role in ensuring the stability and sustainability of organizations. Within this dynamic, the need for gender diversity has been recognized as a strategic element that contributes not only to greater balance and transparency in the decision-making process but also to improved long-term financial performance.
Idea: The objective of this study is to analyze the relationship between corporate governance and financial performance (measured by EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization) of publicly traded companies in Europe, with a focus on the influence of independence and gender diversity in decision-making bodies as well as in internal audit.
Data: The research sample includes public companies in Europe that have published data in LSEG Workspace database for the period 2021–2024.
Tools: This study employs a quantitative methodology based on a linear regression model developed using SPSS (Statistical Package for the Social Sciences), which enables the analysis of the relationship between corporate governance and financial performance (measured by EBITDA).
Findings: The research findings highlight that the structure of the board of directors, particularly its size, is positively associated with financial performance, unlike audit characteristics, which play a monitoring and compliance role without having a direct impact on operational profitability. This paper proposes the use of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) as a financial performance indicator, given that the existing literature is relatively limited regarding this approach, with the use of indicators such as ROA and ROE being predominant. At the same time, this study adopts a comprehensive approach by integrating several corporate governance variables, thereby providing a more comprehensive analysis of oversight and control mechanisms.
Contribution: The research thus offers valuable insights for regulators and corporate management in informing strategic decisions and developing effective corporate governance policies.
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