BOARD CHARACTERISTICS AND FIRM VALUE: MODERATING ROLE OF HUMAN RESOURCE AND REMUNERATION COMMITTEE

Abstract

The purpose of this study is to investigate the effect of board characteristics (board size, board meetings, board independence, female directors, and CEO duality) on firm value. Another aim of this study is to examine the moderating effect of human resource and remuneration committee (HR&RC) on the associations between board characteristics and firm value. The theoretical frameworks of agency, resource dependence, and stakeholder theories are employed in this study. The sample comprises 329 nonfinancial companies listed on the Pakistan Stock Exchange (PSX) with 3136 firm-year observations from 2016 to 2025. The study employs a rigorous methodological framework and diverse estimation techniques. The results support the hypotheses that overall board characteristics positively influence firm value, and that the human resource and remuneration committee's moderating role enhances this positive effect. To the best of the authors' knowledge, the influence of board size, meeting frequency, board independence, gender diversity, and CEO duality on firm value in Pakistani firms has not been yet examined alongside the moderating effect of HR&RC. This study further contributes to board characteristics and HR&RC literature. This research highlights the significance of good governance structures, which may enhance overall performance and sustainability, potentially resulting in wider economic and social benefits for the country.

Keywords: Human resource and remuneration committee (HR&RC), Corporate governance, Board characteristics, Financial performance, Pakistan.