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Since independence in 1961, the government of Tanzania invested heavily in manufacturing sector allowing it to grow smoothly. Despite improvement in macroeconomic stability in the 2000s, the performance of Tanzania’s manufacturing sector remains unimpressive. It is believed that a good composition of board structure is necessary to ensure sound financial performance of manufacturing firms. Therefore, this study examines the effects of board structure to the financial performance of listed manufacturing firms in Tanzania. The study employed quantitative research approach and diagnostic research design to measure the effects of board structure to the financial performance of listed manufacturing firms in Tanzania. The sample of this study consisted of six listed domestic manufacturing firms. The nature of the data used was secondary, collected from Dar es Salaam Stock Exchange (DSE) official website. The simple and multiple regression was used to measure the degree of association/effect uniquely and collectively between each of the independent variable (board size, ratio of independent directors, average age and gender diversity) and the return on asset (ROA). On testing the relationship between variables, the study found all variables, except ratio of independent directors, had no significant effect to the financial performance of listed manufacturing firms in Tanzania. The ratio of independent directors to the board was found to have a significant negative relationship with financial performance. The study recommended that, appointment of the board members should consider, company size, gender diversity, field experience, expertise, network and business opportunities, professional and academic attributes aiming to create a strong linkage with financial performance. |
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