The Impact of Board Size, CEO Duality, and Corporate Liquidity on the Profitability of Canadian Service Firms

The purpose of this study is to examine the impact of board size, the CEO (Chief Executive Officer) duality, and corporate liquidity on the profitability of Canadian service firms. This study also seeks to extend the findings of Kajola [1] and Gill [2]. A sample of 75 Canadian service firms listed on Toronto Stock Exchange (TSX) for a period of 3 years (from 2008-2010) was selected. This study applied co-relational and non-experimental research design. The results indicate that larger board size (large number of directors) negatively impact on the profitability of Canadian service firms. The findings of this paper also show that the CEO duality and corporate liquidity positively impact the profitability of Canadian service firms. In addition, firm size and firm growth positively impact the profitability of Canadian service firms. This study contributes to the literature on the factors that 1 College of Business Administration, Trident University International, 5757 Plaza Drive, CA, 90630, USA, e-mail: [email protected] 2 School of Business Administration, Simon Fraser University, 515 W. Hastings St, Vancouver, BC, V6B 5K3, Canada, e-mail: [email protected] Article Info: Revised : September 28, 2011. Published online : November 30, 2011 84 The Impact of Board Size, CEO Duality ... affect firm’s profitability. The findings may be useful for the financial managers, investors, and financial management consultants. JEL classification numbers: G32