This paper studies the impact of board composition and ownership structure on accounting as well as market performance of Indian firms in presence of certain unique statutory provisions relating to independent directors and limits on ownership concentration. The study uses a sample of 265 non-finance, non-banking and non-PSU Indian companies of S&P 500 index and applies OLS models initially. Having identified evidence of a possible feedback loop, the study then employs instrumental variables and 2 SLS models to explore how firm performance is impacted by ownership concentration and board composition after controlling for firm-level and industry-level characteristics. A series of robustness tests are used to substantiate the findings from the main analysis. A two-way relationship and ‘nonlinearity’ are recorded between market performance and ownership concentration. The study shows that a moderate-to-high ownership concentration between 25 and 75%enhances firm performance and very low level of concentration adversely impacts the same. Performance is positively impacted by board size but not by board independence. The findings of the study become particularly important for legislators and investors in the backdrop of SEBI’s regulations fixing a maximum limit on promoter’s shareholding and existence of a minimum external directors in the board for listed Indian companies that might have an implication on firm performance from liquidity, agency and information asymmetry perspective. The study documents that an optimal shareholding concentration and large board size with internal directors rather than a high percentage of independent external directors leads to value creation in Indian context. The paper provides new insights onto the relationship between board composition, ownership structure and firm performance in the backdrop of regulations brought out by SEBI in this behalf. The findings of the study have varying degree of application in common law origin countries with strong regulatory framework for investors’ protection.

本文研究了董事会组成和股权结构对印度公司会计和市场绩效的影响，这些法律存在与独立董事有关的某些独特法律规定以及对股权集中度的限制。该研究使用了265家S＆P 500指数的非金融，非银行和非PSU印度公司的样本，并最初应用了OLS模型。在确定了可能存在反馈回路的证据之后，该研究采用了工具变量和2个SLS模型，以探讨在控制了公司水平和行业水平特征之后，所有权集中度和董事会组成对公司绩效的影响。一系列鲁棒性测试用于证实主要分析的结果。市场绩效与所有权集中度之间存在双向关系和“非线性”。研究表明，中高股权集中度在25％至75％之间可以提高公司绩效，而非常低的股权集中度则会对公司产生不利影响。绩效受董事会规模的积极影响，但不受董事会独立性的影响。在SEBI的法规为发起人的股权设定最大限制以及印度上市公司董事会中存在最低外部董事的情况下，这项研究的结果对立法者和投资者而言尤其重要，因为流通量可能会影响公司的业绩，代理和信息不对称的观点。该研究表明，在印度，最佳的股权集中度和内部董事的大董事会规模而不是独立外部董事的高比例会导致价值创造。该文件在SEBI代表此出台的法规的背景下，对董事会组成，股权结构和公司绩效之间的关系提供了新的见解。这项研究的结果在具有强大的投资者保护监管框架的普通法起源国中有不同程度的应用。