Relationship between corporate governance and firm's performance

Recent corporate frauds associated to accounting and other scandals purportedly blamed to top company's managers have brought into public eyes the recurring question of whether companies are managed on the best interests of stakeholders. A survey was conducted in 2002 by McKinsey & Company which found that about 80 percent of institutional investors pay a premium for a well-governed company. The company's monitoring function is substantial part of corporate governance of which effectiveness can be determined by its independence, size and composition of board of directors. Present study makes an attempt to know the impact of board size (Number of Directors) and its independence on firm's performance.