Board characteristics and integrated life cycle classification of the firms listed on the Tehran Stock Exchange using DeAngelo and Dickinson Models

Nowadays, only efficient firms can survive in today’s competitive world. Efficiency is thus characterized as a key component of boards’ decisions. Accordingly, this article aims at investigating board characteristics and integrated life cycle classification of the firms listed on the Tehran Stock Exchange. To this end, the financial statements of 90 firms listed on the Tehran Stock Exchange including 18 firms in five integrated life cycle stages obtained from the combination of the models developed by DeAngelo (2006) and Dickinson (2011) were examined over the period of 2012-2016. The results revealed that certain efficient characteristics of boards including CEO tenure, board independence and managerial ownership percentage exert positively significant impact on life cycle classification. Moreover, most (positive) changes are predicted to occur first during the maturity stage and then in the growth stage, whereas the least changes (positive) are expected to happen in the decline stage followed by stagnation. Therefore, according to the results of the research hypotheses, it is suggested to use effective members of the board of directors (longer period of tenure, independence and ownership of the director in the company's stock) in order to grow and develop the economy and increase the value of the company, to create strategic opportunities for the company. And lead to changes in the corporate life cycle.