Size really matters: Further evidence on the negative relationship between board size and firm value

This study examines the impact of corporate governance mechanisms on the firm value of Singapore and Malaysia firms (as measured by Tobin's Q). We find little evidence of relationships between most corporate governance mechanisms and Tobin's Q. However, consistent with Yermack [Higher market valuation of firms with a small board of directors. J. Financ. Econ. 40 (1996), 185-211] and Eisenberg et al. [Larger board size and decreasing firm value in small firms. J. Financ. Econ. 48 (1998), 35-54], we find that there is an inverse relationship between board size and firm value in both countries. This suggests that the negative relationship between board size and firm value transcends different corporate governance systems.