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1
Bar-Hava, Keren, Feng Gu, and Baruch Lev. "Market Evidence on Investor Preference for Fewer Directorships." Journal of Financial and Quantitative Analysis 55, no. 3 (January 28, 2019): 931–54. http://dx.doi.org/10.1017/s0022109019000085.
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We examine investors’ preference for directors serving on fewer versus more boards (“busy directors”) by measuring market reaction to busy directors’ resignations at the companies that still keep these directors on the board. We find a positive reaction implying a preference for fewer directorships. The reaction is more positive when the need for the director’s services is greater, when the resignation frees up more of the director’s time, and when the director is of higher quality. Furthermore, we find that following their resignation, directors increase their board responsibilities/leadership at firms that still retain them and seek no board appointments elsewhere.
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Grove, Hugh, Mac Clouse, and Tracy Xu. "Benchmarking boards of directors for better corporate governance." Corporate Board role duties and composition 16, no. 2 (2020): 8–18. http://dx.doi.org/10.22495/cbv16i2art1.
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The key question and major lessons learned in this research are that individual companies and their boards of directors could use the board director benchmarking information compiled in the Conference Board Report to assess their own boards of directors’ corporate governance practices. For an initial benchmarking approach, this paper compared a poor long-term market performance company (Grove & Clouse, 2019) with a strong long-term market performance company (Grove & Lockhart, 2019). The following benchmarked differences in the boards of directors of these two companies were key success factors for constellation: specific industry knowledge, younger directors, coaching/nurturing, involved roles, long-term compensation of directors, no board entrenchment, board assessment, and board committee rotation. The major sections of this paper are literature review, corporate board practices, benchmarking board of directors: poor long-term market performance example, benchmarking board of directors: strong long-term market performance example, conclusions, and future research. A major limitation of this paper, which could be investigated in future research, is to analyze benchmarked board categories to see if they help explain differences in comparative long-term market performances by many companies since companies and their markets are diverse.
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Meiliana, Meiliana, and Iven Julia. "Analisis Pengaruh Struktur Dewan Direksi terhadap Kinerja Perusahaan." Global Financial Accounting Journal 6, no. 1 (April 30, 2022): 170. http://dx.doi.org/10.37253/gfa.v6i1.6683.
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Purpose - This study aims to determine the effect of the board structure on company performance. This study has 6 independent variables, which consist of the size of the board of directors, independent directors, board of directors meetings, board of directors education, female directors, and managerial ownership.
Research Method - The sample used in this research is quantitative data with a purposive sampling technique. Based on the criteria, the samples collected from 473 companies in the period 2014-2018. The sample data is tested using panel data regression.
Findings - This study concludes that all the independent variables have no significant effect on company performance. Board of directors still needs to be controlled to achieve good performance. Independent directors rarely interfere on other director decision. Board of director’s meetings only incurs unnecessary expenses. Board of director's education is just a qualification. Women's board of directors in each country could have difference effect because of cultural differences. There are still many directors in public companies that do not have ownership in the company, so there is still no visible effect on managerial ownership.
Implication - The findings of this study imply that corporate governance still needs to be strengthened to improve company performance. There are still many problems within the company due to poor governance.
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Kostyuk, Alexander N. "A practitioner’s research: Director remuneration in Ukraine." Corporate Board role duties and composition 2, no. 2 (2006): 37–42. http://dx.doi.org/10.22495/cbv2i2art4.
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Remuneration of members of the supervisory boards in Ukrainian joint-stock companies is the most controversial issue of the corporate board practices. Despite the firm belief of the shareholders that the director remuneration is one of the most important factors influencing the board performance, there are still many companies (21 per cent) where directors are not remunerated for their work on the supervisory board. This report examines practices of the director’s remuneration in Ukraine.
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Daily, Catherine M., and Dan R. Dalton. "Are Director Equity Policies Exclusionary?" Business Ethics Quarterly 13, no. 4 (October 2003): 415–32. http://dx.doi.org/10.5840/beq200313433.
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Abstract:This paper examines two recent trends relative to boards of directors’ compensation, and their potential incompatibility. There has been some progress in increasing board diversity, specifically the inclusion of women and minorities on boards. The increasing trend requiring directors to hold/purchase equity as a requirement of board membership may seriously compromise further improvements in diversifying boards. Also, an increasing number of companies compensate directors partially or fully in stock grants and options. These compensation policies may be exclusionary, especially for women and minorities, impacting the quality of boardroom discussions and decisions. This study systematically examines whether corporations requiring director equity are exclusionary toward women and minority directors. Contrary to being exclusionary, companies with director stock requirements and annual stock awards have greater representation by women and minorities on their board. Moreover, larger companies are both more likely to have such policies and have higher proportions of women and minorities on the board.
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Mans-Kemp, Nadia, Suzette Viviers, and Jenna Weir. "Investigating the extent and impact of director overboardedness using a comprehensive measure." Corporate Governance: The International Journal of Business in Society 20, no. 5 (May 20, 2020): 821–36. http://dx.doi.org/10.1108/cg-07-2019-0234.
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Purpose Directors can become overextended when they serve on multiple boards simultaneously. Previous scholars mostly considered directorships held at listed companies. This study aims to investigate the extent and impact of director overboardedness in an emerging market by using a comprehensive measure. Design/methodology/approach The analysis covered 1,600 directors who served on the boards of the 100 largest companies listed in South Africa over the period 2011–2016. In addition to directorships held at listed companies, board positions at unlisted companies and other entities such as state-owned enterprises were considered. Board committee memberships at the sample companies were furthermore included. Random effects ANOVA was conducted to test for significant differences in board and committee meeting attendance. Findings Two-thirds of the considered directors were overboarded when accounting for all their positions. Board committee memberships increased notably over the research period. There was no significant difference in the percentage of board meetings attended between overboarded and non-overboarded directors. However, those directors who held three or more positions simultaneously attended significantly more board committee meetings than their counterparts who held fewer positions. Of the considered committees, the remuneration committee typically had the highest proportion of overboarded directors. Originality/value Eligible board candidates are in high demand given the limited talent pool in South Africa. The findings contradict the busyness hypothesis and suggest that director overboardedness should be evaluated on a case-by-case basis.
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Dimovski, Bill, Luisa Lombardi, Christopher Ratcliffe, and Barry John Cooper. "Australian Real Estate Management and Development companies and women directors." Property Management 34, no. 1 (February 15, 2016): 18–28. http://dx.doi.org/10.1108/pm-12-2014-0052.
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Purpose – There is a large literature advocating the importance of a greater proportion of women directors on boards of publicly listed firms. The purpose of this paper is to examine the numbers and proportions of women directors, including women executive directors, on listed Australian Real Estate Management and Development (REMD) companies to identify how prevalent women directors are on such boards. Design/methodology/approach – The study examines the numbers and proportions of women directors for 35 REMDs in 2011 and compares this to the broad board composition data on 1,715 Australian Stock Exchange listed entities. Statistically significant findings are evident due to the identified low proportions. Findings – The study finds that of all the Financials Sub Industry sector groups, REMDs have the lowest proportion of female directors on theirs boards – eight women on each of 35 company boards compared to 159 men on these 35 boards at 2011. Of the eight, there were only two women executive directors on boards compared to 50 men. Statistically, it appears that having women directors on REMD boards is not considered important. Even at December 2014, there are only ten women on seven company boards and only one remaining executive director of an REMD company. Practical implications – Given that female board representation is positively related to accounting returns and that there is a growing voice for legislation to impose mandatory proportions of women directors on boards around the world, it may be in the interests of REMD boards to consider appointing more women more quickly. Originality/value – The study is the first to examine the numbers and proportions of women directors amongst REMD companies to identify the paucity of such women directors.
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Das, Pradip Kumar. "Impact of Women Directors on Corporate Financial Performance-Indian Context." World Journal of Social Science Research 6, no. 3 (July 23, 2019): p320. http://dx.doi.org/10.22158/wjssr.v6n3p320.
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Good corporate governance creates the properly structured board of directors capable of taking independent decisions for the welfare of the company. Women directors or female directors with varied backgrounds and experiences tend to look at problems and solutions from wider perspectives, thereby, diversity in boards has been widely considered as an important contributor to improved decision-making. Against this backdrop, the paper empirically investigates the association between participation of female director on board with the financial performance of corporate, using a sample of 16 listed companies’ board membership in India. The study reflects positive and significant impact of female directors on financial performance in the listed companies. The findings could be scientific basis for Indian company to build the most proper board for themselves and contributes to the existing literature through the empirical evidence with more insight into the effect of corporate governance, particularly female directors on firm outcomes from a typical developing country, India. Thus, it is suggested that Indian companies should think about the femininity on board and in senior management to improve financial viability and performance to achieve sustainable growth.
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Narayan, Shannu. "Corporate Board Governance from Critical Mass Theory Lens: Revisiting Indian Companies Act 2013." GLS KALP: Journal of Multidisciplinary Studies 1, no. 3 (March 22, 2024): 1–11. http://dx.doi.org/10.69974/glskalp.01.03.56.
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Indian gender quota rule mandates to have at least one-woman director on corporate board. Gender diversity of board is a tool to assess a corporate governance compliance. The subject can be addressed from legal, public policy, political science and business studies gamut considering and realising that corporate governance norm compliance is very significant. Gender quota provision chiefly impacts the composition of boards of directors and thus the strategic direction of these publicly traded and state-owned enterprises. Critical mass theory which is applied to various fields, could be applied in this field also to ensure efficacy of the board by merit and composition. This paper highlights the need for “atleast three women directors” or one-third of the board should be women directors” for making the change.
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Oosthuizen, A., and S. Lahner. "Board diversity and sustainability performance." Southern African Business Review 20, no. 1 (March 27, 2019): 118–36. http://dx.doi.org/10.25159/1998-8125/6046.
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The purpose to this study was to describe and explore the difference in the board composition and characteristics of sustainability performing companies compared with other companies in terms of gender, ethnicity, and affiliation, uniquely, the inclusion of directors from a non-business background. This exploratory study used a cross-sectional design in the form of a quantitative comparative analysis, and a longitudinal design in the form of a trend analysis to compare the differences in board composition between a sample of sustainability performing companies and a sample of other companies listed on the FTSE/JSE All Share Index between 2004 and 2010. Inclusion on the Social Responsibility Investment (SRI) Index was used as a proxy for sustainability performance. 13The study provided support that director background as a board attribute may be linked to overall sustainability performance. It further provided insight into who board members should be, namely non-executive directors with non-business backgrounds. 14The findings of this study suggest that the nomination committees of companies wanting to improve sustainability performance should consider the recruitment and appointment of non-executive directors from non-business backgrounds on to their boards. The study provides grounds for further empirical studies on the causal relationship between board compositions and sustainability performance
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Chtourou, Sonda Marrakchi, Soumaya Ayedi, and Yosra Makni Fourati. "Determinants of board composition: Evidence from Tunisian companies." Corporate Ownership and Control 3, no. 2 (2006): 165–73. http://dx.doi.org/10.22495/cocv3i2c1p2.
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This study focuses on the composition of boards of directors in the Tunisian context. We model the composition of the board of directors as a function of alternative governance mechanisms, some board characteristics and other control variables. On a sample of 97 Tunisian firms, we find evidence that the proportion of outsiders on the board of directors is positively associated with large block, institutional and overseas ownerships, and board size. We document that the CEO duality is associated with a decrease in the board independence. We fail to find evidence that increased debt ratio to total assets is inversely associated with the outside board representation. While we predict a positive relationship between the board independence and the firm size, the organizational complexity and the quotation status; our results generally do not support this conjecture
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Jeyhunov, Ahmet, Jong Dae Kim, and Seong Mi Bae. "The Effects of Board Diversity on Korean Companies’ ESG Performance." Sustainability 17, no. 2 (January 20, 2025): 787. https://doi.org/10.3390/su17020787.
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This paper explores the effect of board diversity on environmental, social, and governance (ESG) performance in Korean-listed firms using regression analysis. Our findings reveal that an increased board size significantly correlates with higher ESG scores when combined with other board diversity dimensions. The presence of female directors on boards was found to have a significant effect on environmental and social components of ESG performance. Age diversity exhibits a negative association with ESG scores, emphasizing potential disruptions from intergenerational differences. Foreign directors show no significant impact on ESG performance, suggesting that country-specific contextual factors may limit foreign directors’ influence on boards. The proportion of highly educated directors positively affects the overall ESG performance, aligning with resource dependence and agency theories. Overseas-educated directors play a crucial “bridging” role in adapting sustainable innovations overseas, positively influencing ESG performance. In conclusion, this study provides empirical evidence of the complex relationships between board diversity dimensions and ESG performance in the Korean context. These findings guide stakeholders in shaping inclusive and effective board structures for optimal corporate sustainability.
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Grove, Hugh, Maclyn Clouse, and Tracy Xu. "Board guidance for company climate opportunities." Corporate Board role duties and composition 18, no. 3 (2023): 33–44. http://dx.doi.org/10.22495/cbv18i3art4.
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The major research question of this paper is whether net-zero pledges are a dangerous trap for boards of directors’ guidance and monitoring of their companies’ climate activities and opportunities. There is no current consensus on how to do so. Professor Bob Garatt is the Director at Good Governance Development Ltd, a London External Examiner at Gulf Cooperation Council Board Development Institute. He recommended the following research paper as an important and wise caveat that all boards need to consider as an antidote to easy ESG (environmental, social and governance) rhetoric and accounting. Dyke, Watson, and Knorr (2021), in their paper, “Climate Scientists: Concept of Net-Zero is a Dangerous Trap” provide guidance for boards to assess their companies’ climate activities and opportunities. Their research is summarized in two sections of this paper. This paper expands our five prior research papers, which focused upon specific board responsibilities for various aspects of climate impacts on their companies. To avoid this dangerous trap of net-zero pledges, our current paper provides an overall climate perspective for boards, providing guidance for the board of directors’ responsibilities for assessing the role of their companies in climate activities and opportunities. It is critical for boards to develop guidance and actions for monitoring companies’ climate activities and opportunities
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Li, Michelle, Diandian Ma, and Tom Scott. "Knights and dames on the board of directors." Accounting Research Journal 32, no. 2 (July 1, 2019): 295–310. http://dx.doi.org/10.1108/arj-06-2017-0100.
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Purpose New Zealand reintroduced titular honours (i.e. knighthoods and damehoods) in 2009. We document the prevalence of knights and dames on the board of directors. Design/methodology/approach We use a probit regression to investigate what firm characteristics are significantly associated with having a knight or dame on the board of directors. Findings We find 19 of 112 companies have a knight or dame on the board. These companies are bigger and have larger and more independent boards than other companies. We also find a knight or dame is more likely to serve in companies that have higher dividend yields. Research limitations/implications The generalisability of our results is limited by the small number of knights and dames on the boards of listed companies and our archival regression approach. Although we document an association, we cannot prove causation. Originality/value We show that directors with greater and easily visible reputational capital are more likely to supply their services to companies that mitigate risks to their reputation and protect minority shareholder interests.
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Muñoz Chávez, Felipe, Andrea King Domínguez, Rosa Martha Ortega Martínez, and Luis Améstica Rivas. "Board of directors and value of Chilean companies." Tendencias 26, no. 1 (January 1, 2025): 61–88. https://doi.org/10.22267/rtend.252601.265.
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Introduction: Boards of directors are key to organizational performance. This study analyzes the composition of boards in non-financial Chilean companies between 2019 and 2022, focusing on the number of members, female participation, and professional diversity. Objective: To assess how these characteristics impact management practices and the strategic direction of organizations. Methodology: A statistical description and multiple linear regression were used to analyze the relationship between the variables and the company's value (Price to Book, Price to Sales, and EV to EBITDA). Results: The analysis shows an average of 7.9 members per board, low female participation, and a concentration in five professional areas. The number of members is positively related to the company's value in all cases. Female participation shows a negative relationship, while professional diversity has a positive impact in some cases, although not significant in others. Additionally, company size and indebtedness also influence company value. Conclusions: The number of board members positively impacts company value, while female participation and professional diversity show a less clear influence.
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Blanco-Alcántara, David, José María Díez-Esteban, and M. Elena Romero-Merino. "Board networks as a source of intellectual capital for companies." Management Decision 57, no. 10 (November 11, 2019): 2653–71. http://dx.doi.org/10.1108/md-12-2017-1238.
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Purpose The purpose of this paper is to use the dynamic capabilities framework to explain the effect of board networks, as a source of intellectual capital, on firm performance. The authors propose that the influence of board interlocks depends on their ability to contribute to strategic decision making. As a result, their effect is subject to the business context in which they occur and the different role of the interconnected directors involved. Design/methodology/approach The authors use social network analysis to make board connections and to calculate centrality measures. The authors also identify busy boards to analyze whether their effect differs from centrality. The authors estimate the theoretical model using the Generalized Method of Moments in order to take advantage of the panel database. Findings For a sample of Spanish firms from 1999 to 2015, the results show there is no direct significant effect of directors’ networks on firm performance. However, the authors find a positive and significant influence of intra-industry board connections, particularly when they are established among outsiders. Research limitations/implications The Spanish context of the study can limit the generalization of the papers’ results. Practical implications The results can be useful both for practitioners – since they can serve as a guide for companies to reformulate their boards in search of the optimal structure-, and when implementing good governance codes – establishing limits for director interlocking. Originality/value This study helps to offer a better understanding of how directors’ networks can add value to the firm depending on the kind of resources they provide (context) and the role of the director who is connected.
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Liu, Yuexi. "A Machine Learning Approach for Selecting Directors of Chinese Listed Company." Highlights in Business, Economics and Management 5 (February 16, 2023): 380–89. http://dx.doi.org/10.54097/hbem.v5i.5109.
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Contemporarily, the directors sever as a vital role in companies strategy decisions and daily operation. On this basis, it is crucial to select a suitable and appropriate directors of listed companies to fulfill the requirements and criteria of shareholders (at least most of them). In this case, this paper discusses a financial big data-based machine learning approach for board selection of Chinese listed companies. This approach achieves effective feature extraction through big data related to changes in boards of directors and successfully identifies the outstanding features of excellent boards. The empirical results show that machine learning models have a significant advantage over traditional methods, such as ordinary least squares (OLS) regression, for board selection by Chinese companies. According to the analysis, the model can extract important features of an excellent board of directors from big data related to the board’s features, such as academic, research and development (R&D), and politician backgrounds. These results shed light on guiding further exploration of board selection in China.
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Cullinan, Charles P., Lois Mahoney, and Pamela B. Roush. "Entrenchment vs long-term benefits: classified boards and CSR." Journal of Global Responsibility 10, no. 1 (March 8, 2019): 69–86. http://dx.doi.org/10.1108/jgr-11-2018-0063.
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PurposeAlthough most corporate directors face reelection by shareholders each year, directors of companies with classified boards are elected for multiple-year terms. Classified boards may engender managerial entrenchment, which may make directors less responsive to shareholders’ interest in corporate social responsibility (CSR). Alternatively, classified boards may engender a longer-term focus, which could make the board more willing to engage in projects with longer-term benefits, such as CSR. This study aims to assess whether larger boards, with potentially more diverse voices, may be positively related to CSR, and a larger board may change the classified boards/CSR relationship.Design/method/approachThe authors examine the relationship between board type (companies with and without classified boards), board size and CSR for 4,489 firm-years (1,540 with classified boards and 2,949 without classified boards) from 2013 through 2015.FindingsThe authors find no difference in CSR strengths between companies with and without classified boards, but the authors do find that companies with classified boards have more CSR concerns than companies without classified boards. For all types of boards, a larger board size is associated with more CSR strengths and reduces the negative impact of having a classified board on CSR concerns.Practical implicationsClassified boards may be less responsive to shareholders’ preference for reduced company CSR concerns, but an increase in board size can mitigate this effect.Social implicationsClassified boards may weaken a company’s CSR performance.Originality/valueThis is the first paper to consider the relationship between classified board and CSR.
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Umaroe, Indira Karima, and Hamidah Hamidah. "Pendidikan dan Pengalaman Kerja Dewan Direksi di Negara Maju terhadap Pengungkapan Keberlanjutan." E-Jurnal Akuntansi 33, no. 3 (March 26, 2023): 798. http://dx.doi.org/10.24843/eja.2023.v33.i03.p16.
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The board of directors as a strategic decision maker can influence corporate sustainability disclosures. The purpose of this study was to determine the effect of the education and work experience of directors in developed countries on sustainability disclosure. The research sample consisted of 64 companies listed on the IDX for the 2017-2021 period. Multiple linear regression in STATA software is used to analyze the data. The results of the analysis prove that the education and work experience of boards of directors in developed countries have a positive effect on corporate sustainability disclosures in Indonesia. The Board of Directors has integrated values regarding sustainability into itself. The novelty of this study is to differentiate the samples based on their disclosure, comprehensive or core options. This research provides practical implications for companies to pay attention to the background of directors in order to realize better sustainability disclosures.
Keywords: Director’s Education; Director’s Working Experience; Sustainability Disclosures; Upper-Echelon Theory
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Clements, Curtis, John D. Neill, and Paul Wertheim. "Multiple directorships, industry relatedness, and corporate governance effectiveness." Corporate Governance 15, no. 5 (October 5, 2015): 590–606. http://dx.doi.org/10.1108/cg-05-2014-0060.
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Purpose – The purpose of this paper is to investigate the relationship between the industry relatedness of directors’ multiple directorships and corporate governance effectiveness. The authors posit that a director gains “beneficial experience” by serving on outside boards of companies in related industries, with a resulting increase in governance effectiveness. Conversely, they predict a decrease in governance effectiveness when directors serve on outside boards of companies in unrelated industries. Design/methodology/approach – Using publicly available data, a Tobit regression model is used to examine the effect of the industry relatedness of board members’ multiple directorships on corporate governance effectiveness. Findings – The results demonstrate a significant positive correlation between the industry relatedness of directors’ multiple directorships and corporate governance effectiveness. It was found that this industry relatedness effect is stronger for directors of small companies than large company directors. The paper also documents a significant negative effect on governance effectiveness for small firms whose directors increase their board service on non-industry-related boards. Originality/value – Prior research has examined the “Busyness Hypothesis” and the “Experience Hypothesis” as mutually exclusive hypotheses. This paper extends prior research by examining the possibility that the two hypotheses are not competing, but rather that both an experience effect and a busyness effect may be present for directors serving on multiple boards, and that one of the effects will dominate the other, based on certain company-specific characteristics.
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Morris, Tania, Amos Sodjahin, and Hamadou Boubacar. "Ownership structure and women on boards of directors of Canadian listed companies." Corporate Ownership and Control 18, no. 3 (2021): 120–35. http://dx.doi.org/10.22495/cocv18i3art10.
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This study examines how the structure of shareholder ownership (i.e., management, external blockholders, and board ownership) affects the presence of women on boards of directors. The results of an analysis of a sample of listed Canadian companies for the period 2007-2015, controlling for endogeneity, indicate that the proportion of women sitting on a firm’s board of directors is influenced by its shareholding structure, thus, supporting the view that the two governance mechanisms of gender diversity and shareholder structure can substitute for each other. The results also show that there is a curvilinear relationship between a company’s ownership structure and the proportion of women on its board of directors and audit committee. Indeed, findings show that as the concentration of company ownership increases, the proportion of women on boards of directors decreases to a threshold, following which we observe an increase in the proportion of women sitting on boards of directors and particularly on audit committees
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Thompson, Jeffrey Kurt Orlando, and Richard C. Thompson. "Racial Diversity in Publicly Traded Companies." International Journal of Sustainable Entrepreneurship and Corporate Social Responsibility 5, no. 2 (July 2020): 66–85. http://dx.doi.org/10.4018/ijsecsr.2020070105.
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This article shares some of the results of a thesis investigating the relationship between the racial diversity of the board of directors in Canadian companies that traded on the Toronto Stock Exchange (TSX). The central question addressed was how organizational factors affect the racial diversity of board membership. The thesis expanded on a prior study that modelled gender diversity on boards of directors by focusing on the recommended area of racial diversity in the Canadian environment. Though many companies do not share their diversity details, using multiple regression analysis, the results showed that there was more racial diversity on larger boards. From a population of about 3,000 companies, the researchers identified a sample of 148 companies, with all the required parameters. This sample contained 1,246 board members, where 9.4% (117 board members) were visible minorities. The ANOVA analysis of the model demonstrated that it was a suitable tool to conduct the investigation. However, the variables did not show any strong significance.
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Intan Nurwanti, Tiara Putri Hendrian, Rifati Nabila, and Henny Setyo Lestari. "Ownership Structure, Board Characteristics, Dan Dividen Policy Pada Perusahaan Manufaktur Yang Terdaftar di BEI." Jurnal Ekonomi 27, no. 1 (March 1, 2022): 16–33. http://dx.doi.org/10.24912/je.v27i1.851.
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This study aims to determine the effect of ownership structure, board characteristics on dividend policy. The research sample is a manufacturing company listed on the Indonesia Stock Exchange for the 2016-2020 period. The independent variables are institutional ownership, ownership concentration, board of directors size, female board of directors ratio, independent board ratio, the dependent variable is dividend policy and the control variables are company age, firm size, financial leverage, return on assets (ROA). The number of samples in this study were 30 manufacturing companies using purposive sampling technique. Panel data regression shows that the size of the board of directors, the ratio of the board of directors has a positive effect on dividend policy, institutional ownership, ownership concentration, the ratio of independent boards has no effect on dividend policy. It is hoped that the research results will provide input for companies and investors to consider institutional ownership, concentration of ownership, size of the board of directors, the ratio of women's board of directors, and the ratio of independent boards because they have an influence on dividend policy.
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Thuy, Dr Phan Thi Thanh. "The Role of Supervisory Board in Corporate Governance in Vietnam: From Legal Regulations to Practice." Revista Gestão Inovação e Tecnologias 11, no. 4 (July 22, 2021): 2546–63. http://dx.doi.org/10.47059/revistageintec.v11i4.2300.
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Good corporate governance is always associated with an effective internal control system, which is expected to quickly forecast and detect the infringements of laws and the company's charters committed by the main corporate governance bodies like the board of directors, the general director, and provide timely advice on remedial solutions. Following this theory, since the adoption of the first Vietnamese company law in 1990, the supervisory board, a special body of Vietnamese corporate governance structure, has formed and become a traditionally internal control body in joint-stock companies (JSCs). However, supervisory boards seem not to promote their effectiveness as expected. Many major violations conducted by the board of directors and the CEO took place in large companies, where the supervisory boards did not detect or were complicit in these violations. Most recently, the trend of replacing supervisory boards with independent directors and audit committees has occurred in many public companies in Vietnam. This paradox raises questions about the ineffectiveness of supervisory boards and the reasons causing the situation. To find the answers, the article will focus on analyzing the role of the supervisory board in Vietnamese JSCs compared with international practices. Thereby, to find out the reasons for the limitations of supervisory boards in both legal provision and practice. To conclude the research, the article will make some suggestions for reforming the supervisory board so that this internal control body could bring its effectiveness.
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Ardillah, Kenny. "Females in Corporate Board Diversity and Its Impact on Earnings Quality." Journal of Accounting Auditing and Business 7, no. 2 (July 26, 2024): 64–77. http://dx.doi.org/10.24198/jaab.v7i2.54965.
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Earnings quality is formed on corporate governance. The company's internal governance mechanism consists of the president director, the finance director, the board of directors, commissioners, and the audit committee. However, there is still a lack of studies exploring the relationship between female in-board diversity and earnings quality, especially in Indonesia. It is because Indonesia has a unique corporate governance system, even though Indonesia follows a corporate governance system on the European continent, namely the two-tier boards. This study aims to determine the influence of female president directors, female finance directors, female board of directors, female board of commissioners, and female audit committee on earnings quality. The sample of this study is manufacturing companies listed on the Indonesia Stock Exchange. Samples were selected using the purposive sampling method, and 70 companies were selected as research samples with a total data collection of 350 data from the research period of 2018-2022. Data analysis in this research uses multiple linear regression. The results of this study indicate that the presence of a female president director, a female finance director, and a female board of commissioner negatively affects earnings quality. On the other hand, the presence of the female board of directors has a positive effect on earnings quality. The female audit committee does not affect earnings quality. The author can conclude that the female gender still does not play an important role in the company's management to increase earnings quality because female’s behavior is more callous and not more assertive than male.
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Prithaningtyas, Arvianti, and Windijarto Windijarto. "HOW CAN BOARD DIVERSITY PROMOTE CORPORATE INNOVATION? : A SYSTEMATIC LITERATURE REVIEW." Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA) 7, no. 3 (December 14, 2023): 1860–76. http://dx.doi.org/10.31955/mea.v7i3.3602.
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Corporate innovation plays a crucial role in companies to remain sustainable in the future. Companies can also encourage the economic strength of a country. Innovative companies can be competitive in the market by improving marketing strategies and product innovation. Therefore, they can improve company performance. The board of directors has the authority to make strategic decisions to determine company performance. Based on the results of collecting 59 pieces of literature and then analyzing them, the researchers can conclude that various board characteristics such as board gender, foreign board, and board age can influence companies to innovate. Female directors can provide valuable insight, knowledge, and skills for companies to innovate to survive in the future. Foreign boards with cross-border knowledge and international relations can implement it into companies to innovate. Young directors have a much more risk appetite and are creative in trying new things.
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AFAM-MEBEI BLESSING OMEBERE and EBIAGHAN, Orits Frank. "EMPIRICAL NEXUS BETWEEN CORPORATE GOVERNANCE ATTRIBUTES AND DIRECTORS REMUNERATION: NIGERIAN EVIDENCE." Finance & Accounting Research Journal 4, no. 3 (October 18, 2022): 58–75. http://dx.doi.org/10.51594/farj.v4i3.385.
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This study is aimed at investigating the relationship between corporate governance attributes and director’s remuneration in Nigerian quoted firms. Specifically the study attempted to proffer answers to questions as it relates to the impact of board size, firm size, board independence, chief executive officer duality on directors' remuneration. Secondary data were extracted from the financial statements and accounts of the sampled firms for a 25years period spanning 1997-2021. And analyzed using Ordinary Least Squares Regression (OLS) E-views version 10 The study revealed that Board size, firm size, and board independence exerted positive effect on directors' remuneration, whereas the presence of a chief executive officer duality had negative influence on directors' remuneration. It was recommended that the position of Companies and Allied Matters Act (CAMA) 2020 as it concerns directors’ remuneration should be carefully adhered to and that the directors' remuneration must not be altered by any director irrespective of their positions in the organization. It is concluded that the chief executive officer duality should not be used as a yardstick in the determination of directors’ remuneration rather the board size, firm size, board independence should be used as a measure for fixing directors’ remuneration.
Keywords: Director’s Remuneration, Board Size, Firm Size, Board Independence, Chief Executive Officer Duality.
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Huang, Hsueh-Li, Lien-Wen Liang, Hai-Yen Chang, and Hsiu-Yuan Hsu. "The Influence of Earnings Management and Board Characteristics on Company Efficiency." Sustainability 13, no. 21 (October 21, 2021): 11617. http://dx.doi.org/10.3390/su132111617.
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Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the influence of earnings management and board characteristics on company efficiency. The data sample includes 396 Taiwanese electronics and biotechnology companies from 2009 to 2017. The results indicate that earnings management has an insignificant influence on company efficiency with mixed results on the interactions between earnings management and board characteristics. When companies practiced earnings management, director experiences, a higher proportion of female directors, and a higher number of board meetings increased company efficiency. In contrast, a higher number of independent directors and a higher attendance rate of the directors at the board meeting decreased company efficiency. The results of this study suggest that board diversity, more female directors, and meetings could still improve firm performance despite companies’ engagement in earnings management.
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Atkins, Jill, Mohamed Zakari, and Ismail Elshahoubi. "Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya." Corporate Board role duties and composition 14, no. 1 (2018): 22–33. http://dx.doi.org/10.22495/cbv14i1art2.
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This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.
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Ishak, Zuaini, Nor Aziah Abdul Manaf, and Aza Azlina Md Kassim. "Quality of board of directors and capital structure decisions in Malaysian companies." Corporate Ownership and Control 8, no. 4 (2011): 264–74. http://dx.doi.org/10.22495/cocv8i4c2art3.
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This study examines the relationship between board structure and board process on capital structure decisions of Malaysian public listed companies. The study combines a survey approach and secondary data from the year 2007 to 2009. Based on a sample of 175 companies, the findings reveal that directors’ risk appetite is positively correlated to company leverage while directors’ tenure has negative relationship with leverage. With regards to board process, four variables are identified to be negatively correlated to capital structure which is boards’ risk oversight, performance of independent directors, CEO’s performance evaluation and accessibility of information.
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Voveris, Donatas, Julija Savicke, and Greta Drūteikienė. "Characteristics of the boards of directors at firms listed on Nasdaq Baltic." Problems and Perspectives in Management 21, no. 3 (September 25, 2023): 726–35. http://dx.doi.org/10.21511/ppm.21(3).2023.56.
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The board of directors plays a pivotal role in firm governance, endorsing strategic choices, coordinating operations, ensuring regulatory compliance, and furnishing organizational support. This paper aims to examine the characteristics of the boards of directors and the guidelines for board composition in publicly listed firms in the Baltic countries. The analysis consists of two stages. The first is a quantitative investigation of the attributes of boards (board size, CEO duality, gender diversity, foreign directors, board committees, board independence, and directors’ occupational background) targeting 35 firms and 187 directors. The second is a qualitative analysis of guidelines for board composition of Nasdaq Baltic-listed firms in Estonia, Latvia, and Lithuania. The results reveal that the attributes of boards of directors do not raise concerns. Despite their relatively smaller scale in contrast to the United States or Europe, the boards of Nasdaq Baltic companies align effectively with their respective firm sizes. Notably, CEO duality is absent in Estonian and Latvian listed firms, while it is only partially evident in Lithuania. Moreover, directors’ heterogeneous professional backgrounds distinctly contribute to these boards’ overall enhancement. While the existence of board committees is strongly recommended, they are primarily implemented as a tool for controlling.
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Tenuta, Paolo, Domenico Rocco Cambrea, and Debora Fazzari. "Are All Independent Directors the Same? Evidence from Italian Listed Companies." International Journal of Business and Management 13, no. 9 (August 1, 2018): 78. http://dx.doi.org/10.5539/ijbm.v13n9p78.
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The purpose of this study is to investigate the impact of independent directors on the performance of Italian listed firms on the Milan Stock Exchange during the period 2006-2015. After applying a Fixed Effect Model, the empirical findings suggest that the composition of the board may affect corporate performances and, more specifically, a significant relationship emerges between the presence of independent directors within the Board and company results. Specifically, independent directors and independent female directors positively affect firm performance. Diversely, independent busy directors, those with hold more than three directorship in other boards, do not affect performance.
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Kaur Virk, Gundeep. "The influence of board characteristics on corporate illegality." Journal of Financial Regulation and Compliance 25, no. 2 (May 8, 2017): 133–48. http://dx.doi.org/10.1108/jfrc-05-2016-0045.
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Purpose In light of frequent corporate scams and frauds, this paper aims to investigate the relationship of corporate illegality with the board of directors’ characteristics in Indian manufacturing companies. Design/methodology/approach The board of director characteristics of sample companies charged with violation of the Securities Exchange Board of India (SEBI) regulations from 2008 to 2013 are matched to an equivalent-sized control data set. A cross-sectional logistic regression model is applied to test the hypothesized association. Findings The findings suggest that the SEBI violations are less likely to occur when a large fraction of the board of directors consists of independent directors and when the individual directors have multiple appointments on the boards of other companies. However, it is observed that the size of the board and its meetings have no observable association with violation of the SEBI regulations. Research limitations/implications This work is likely to aid future research in exploring the impact of governance mechanisms on the occurrence of illegality. In future, studies may be conducted to investigate the probability of illegal corporate events using a larger sample size and corporate governance variables which have not been examined in the present study. Practical implications The analysis provides corporate policy makers and investors an insight to evaluate the vulnerability of a company being engaged in illegality based on its board features. Originality/value The present study is distinct from previous reports as it makes a novel attempt to gauge the relationship between the board of directors’ characteristics and the occurrence of illegality in the Indian corporate section.
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Jurnali, Teddy, and Vonny Vonny. "Pendiri di Dewan Direksi dan Kinerja Perusahaan yang Dimoderasi Koneksi Politik dan Kepemilikan Keluarga." E-Jurnal Akuntansi 33, no. 3 (March 26, 2023): 589. http://dx.doi.org/10.24843/eja.2023.v33.i03.p01.
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This study aims to examine the role of founders on the board of directors on the performance of companies with family ownership and political connections as moderating variables. The determination of the research sample used purposive sampling from companies listed on the Indonesia Stock Exchange (IDX). The number of samples used was 265 companies with a research time span of 2017-2021. Testing using panel regression using Eviews software. The results of the study show that the presence of the founder on the board of directors significantly influences the success of the company. The moderating variable of family ownership strengthens the relationship between founders on the board of directors and company performance, while political connections cannot moderate the relationship between founders on the board of directors and company performance.
Keywords: Founders on Board of Director; Family Ownership; Political Connection; Firm Performance
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Chiyachantana, Chiraphol N., Siripen Pattanawihok, and Pattarawan Prasarnphanich. "BOARD COMPOSITION, BOARD DIVERSITY AND STOCK PERFORMANCE." International Journal of Business & Economics (IJBE) 6, no. 2 (October 12, 2021): 76–87. http://dx.doi.org/10.58885/ijbe.v06i2.076.cc.
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The study investigates the relationship between six board compositions and stock returns. The results indicate a significant association between various board compositions and stock returns. Specifically, board size and executive directors have a negative impact, whereas independent directors enhance stock returns. Busy directors positively impact the abnormal stock returns for the companies in the non-financial industry, which implies that busy directors who serve on more boards tend to be well connected. More importantly, the results indicate a significant positive relationship between board tenure and stock returns. Board service time is perceived as the board quality of knowledge and experience from the investors’ point of view.
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Herrera-Barriga, Roberto, and Diana Escandon-Barbosa. "Boards of directors and firm internationalization: A bibliometric review." Corporate Governance and Organizational Behavior Review 7, no. 3, special issue (2023): 318–34. http://dx.doi.org/10.22495/cgobrv7i3sip8.
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This paper conducts a bibliometric review of the research on the relationship between boards of directors and the internationalization of companies. Boards of directors play an important role in the success of the internationalization process of companies, as they contribute to strategic decision-making and support access to the resources and capabilities needed to enter the international market. The bibliometric analysis documents are the most influential articles, authors, journals and countries in this field of knowledge, highlighting the diversity of topics addressed. In addition, the co-occurrence analysis reveals the theoretical and conceptual core of the research, knowing the main theories and study variables analyzed. This review lays the groundwork for future research on boards of directors and the internationalization of companies, highlighting the need for more research at a global level, especially in Latin America. It also suggests future lines of research on emerging issues such as board capital and board-to-board networking
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Sufiarina, Sufiarina, Muhammad Ali, Mufrina Mufrina, Ahmad Maulana, and Hendry Frand Tia. "Legal Dynamics of Limited Liability Companies: Unveiling the Power of Commissioners and Shareholders to Take Legal Action Against Directors' Negligence." Unnes Law Journal 9, no. 2 (October 31, 2023): 265–88. http://dx.doi.org/10.15294/ulj.v9i2.75526.
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The Limited Liability Company (LLC) is characterized by its distinct juridical entity, effectively segregating its management group from shareholders. Operating as a business entity, the primary goal of an LLC is profit generation. Functioning as a corporate legal entity with legal personality, an LLC comprises three key organizational components: the General Shareholders’ Meeting, Directors, and Commissioners. Directors, or the Board of Directors (BOD), bear the responsibility of managing and representing the LLC both within and outside the legal realm. The position of BOD is mandated to be occupied by a natural person, or 'naturlijk person,' either as a single individual (Director) or collectively by two or more individuals (Board of Directors). Despite a stringent selection process for board positions, the inherent nature of directors as natural persons introduces the possibility of intentional or negligent errors in management, potentially leading to financial losses. In the face of such negligence, the pertinent question arises: can a commissioner (Board of Commissioners) and/or shareholders initiate legal action against a director or BOD, whose legal standing is as the company’s representative? To address this query, a comprehensive library research initiative is undertaken, focusing on the analysis of Article 97 and Article 98 of the Limited Liability Company’s legal statutes. This examination aims to elucidate the viable courses of action that can be pursued against the company in the event of directorial negligence. The research findings reveal that specific commissioners and/or shareholders, in the absence of a director's power of attorney, are granted the authority by the LLC’s legal statutes to initiate legal proceedings against the director or board of directors in a court of law.
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Igbinosa, S. O., B. O. Akinuli, O. E. Popoola, and A. T. Adeola. "Board Structure and Financial Performance of Manufacturing Companies in Nigeria." British Journal of Multidisciplinary and Advanced Studies 5, no. 3 (June 11, 2024): 25–52. http://dx.doi.org/10.37745/bjmas.2022.04104.
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This study examines the impact of board structure on corporate financial performance in Nigeria. It investigates the Diversity of boards of directors in Nigerian firms and analyses whether board structure has an impact on financial performance, as measured by return on equity (ROE) and return on capital employed (ROCE). Based on the extensive literature, four board characteristics (board Diversity, board size, board ownership and CEO duality) have been identified as possibly having an impact on corporate financial performance and these characteristics are set as the independent variables. The Ordinary Least Squares (OLS) regression was used to estimate the relationship between corporate performance measures and the independent variables. Findings from the study show that there is strong positive association between board size and corporate financial performance. Evidence also exists that there is a positive association between outside directors sitting on the board and corporate financial performance. However, a negative association was observed between directors’ stockholding and firm financial performance measures. In addition, the study reveals a negative association between ROE and CEO duality, while a strong positive association was observed between ROCE and CEO duality. The study suggests that large board size should be encouraged and the Diversity of outside directors as members of the board should be sustained and improved upon to enhance corporate financial performance.
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Cunha, Paulo Roberto da, and Marcio Roberto Piccoli. "Influence of board interlocking on earnings management." Revista Contabilidade & Finanças 28, no. 74 (March 9, 2017): 179–96. http://dx.doi.org/10.1590/1808-057x201701980.
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ABSTRACT The participation of directors on more than one board is called “board interlocking”. This phenomenon contributes to the spread of management and governance practices, through directors sharing their knowledge and experiences on other boards. Thus, directors could “carry” the earnings management practices present in one company into another in which they sit on the board. It is assumed that the greater directors’ direct or indirect connections on boards, the greater the sharing of information, especially information that can be reflected in company earnings quality. In light of the above, the aim of this study is to verify the influence of board interlocking on earnings management in companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBovespa). The study is characterized as descriptive, quantitative, and documentary, and uses a sample of companies listed on the BM&FBOVESPA between 2011 and 2013. For earnings management, the model from Kang and Sivaramakrishnan (1995) was used, while for interlocking, degree centrality measures were used for direct board member connections, and intermediation centrality for indirect connections. The results indicate that earnings management is influenced by the interlocking of board members. It is concluded that the greater the degree centrality, the greater positive earnings management is, and that variations in positive and negative accruals are influenced by board member intermediation. The results reinforce the idea that earnings management behavior can be transferred between companies by the directors that make up their boards.
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Ginevri, Andrea Sacco. "Staggered Boards, Banks and Public Companies: Quo vadis ?" European Business Law Review 28, Issue 4 (August 1, 2017): 575–91. http://dx.doi.org/10.54648/eulr2017028.
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This Article provides a legal overview and analysis of the benefits associated with the adoption of a staggered board of directors by Italian banks and public companies. While there is a widespread opposition to staggered boards among U.S. scholars and investors – being such device a powerful antitakeover measure in the American legal system since directors belonging to a U.S. staggered board may be removed only “for cause” – this Article explains the reasons why staggered boards should be implemented by Italian banks and public companies considering the significant distinctions between the U.S. and the European legal frameworks in this area. Taking into account the new banking governance principles recently introduced by CRD IV and by its implementing measures, this Article explains how the establishment of staggered boards by Italian credit institutions and listed companies may allow them (i) to exclude the risk of potential discontinuities in the management’s action, which are inappropriate in corporations of such complexity and systemic relevance, (ii) to facilitate the initial induction and training of the newly appointed directors and officers, who would benefit from the expertise of other members of the board with longer experience, (iii) to strengthen and foster the institutional dialogue between the board and the shareholders, aimed at achieving an adequate collective knowledge, skills and experience of the management body, and finally (iv) to attract more capital from professional investors, granting them the possibility to appoint their representatives in the board on an annual basis.
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Refakar, Mohammad, and Ming-Ming Lai. "An investigation of board directors’ absence and its determinants in the Malaysian stock market." Corporate Ownership and Control 8, no. 2 (2011): 259–70. http://dx.doi.org/10.22495/cocv8i2c2p3.
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This paper examines the relation between directors’ absence in board meetings as an indicator of directors’ busyness with possible determinants of director absence on the constituent companies of FTSE Bursa Malaysia KLCI index from 2005 to 2008. This study has found board size as the strongest determinant of directors’ absence. As the size grows, there is higher probability of directors to be absent from board meetings. This study found a board size of 9 and less as an optimum board size. We also found that the more independent directors on the board, the less absence they made. The results showed that the number of multiple directorships a director holds, number of annual meetings, age, and ethnicity of the director are not significant determinants.
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Chen, Chen, David K. Ding, and William R. Wilson. "The Old Boys Club in New Zealand Listed Companies." Journal of Risk and Financial Management 14, no. 8 (July 22, 2021): 342. http://dx.doi.org/10.3390/jrfm14080342.
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The board of directors plays an important role in implementing corporate governance in the firm, as directors have a fiduciary duty to the firm’s shareholders. The effectiveness of directors is a key determinant of corporate value and they need to bring a range of skills and experience to the boardroom. This skill and experience cannot be developed solely within the firm, and most boards incorporate non-executive directors who are or have been directors of other firms. Current research on the benefits of interlocking directorships is mixed between the claim that they bring outside feedback to the table and open decision makers’ minds, and those who think outside directors are a waste of money and can reduce company performance. This paper investigates the extent of interlocking directorship in New Zealand and how it affects corporate performance. Our findings of largely no significant impact on firm performance are consistent with the management control theory of director interlocks; the exceptions support the class hegemony theory that links interlocking directorship with a negative firm performance.
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Odeh, Bartholomew Ejembi, and Joseph Eleojo Attah. "Effect of Selected Board Attributes on Tax Aggressiveness of Quoted Insurance Companies in Nigeria." British Journal of Multidisciplinary and Advanced Studies 5, no. 6 (November 17, 2024): 1–16. http://dx.doi.org/10.37745/bjmas.2022.04203.
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The main objective of this study is to examine the effect of selected board attributes on tax aggressiveness of quoted insurance companies in Nigeria. Specifically, the study examines the combined effect of female directors and board financial expertise on tax aggressiveness of quoted insurance companies in Nigeria. Tax aggressiveness was measured using effective tax rate while female directors and financial expertise were measured using proportion of female directors on the board to the total number of independent directors and proportion of financial experts on the board to the total number of independent directors respectively. This study uses the longitudinal research design. The population of the study is the entire twenty-three listed companies in the Nigerian insurance sector. The sample size of twenty-two was selected after eliminating one without complete data. Data were sourced from the annual financial statements of the listed insurance companies for the period 2011-2022. To be able to examine the effect of female directors and financial expertise on tax aggressiveness, the study used panel multiple regression model for the analysis. The result of the study shows that female directors have negative and insignificant effect on tax aggressiveness. However, the study finds statistical evidence which suggests that boards financial expertise has significant effect on tax aggressiveness in the insurance sector. From the findings, it was concluded that board attributes have strong explanatory power on tax aggressiveness. The study recommends that since management could aspire to avoid more taxes, because they estimate the tax benefits too high, more external board members with accounting and corporate reporting knowledge should be admitted on the boards to curtail managerial aggressive tax planning.
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Ninda Febriyanti, Fahira, and Sholikha Oktavi Khalifaturofi'ah. "Good Corporate Governance Dan Financial Distress Pada Perusahaan Manufaktur Di Indonesia." Jurnal Ekonomi 28, no. 2 (July 28, 2023): 274–91. http://dx.doi.org/10.24912/je.v28i2.1625.
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Good Corporate Governance is important for companies to overcome financial difficulties. This study intends to analyze good corporate governance and its influence on predicting the condition of companies in financial distress. Good corporate governance is proxied by institutional ownership, managerial ownership, directors, the board of commissioners, and the audit committee. By using logistic regression for 21 manufacturing companies from 2015 to 2019, it was found that the board of directors and audit committee had a negative effect on financial distress. The board of commissioners has a positive effect on financial distress. The other variables, namely institutional and managerial ownership, have no effect on financial distress. To avoid financial distress in manufacturing companies, it is necessary to have a large board of directors and an audit committee, but not a board of commissioners. The fewer the boards of commissioners, the easier it will be for companies to control financial conditions to avoid financial distress.
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Meiliana, Nelson Ng, and Sheila Septiany. "Can boards of directors in large companies effectively prevent fraud?" Jurnal Akademi Akuntansi 7, no. 4 (November 30, 2024): 609–25. https://doi.org/10.22219/jaa.v7i4.34208.
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ABSTRACT Purpose: The aim to test the impact of the characteristics of board of directors in reducing and preventing the possibility of financial statement fraud with firm size as variable moderating. Methodoly/Approach: The technique used purposive sampling method resulting of total 435 data and 87 companies in mining sector for the period 2018 – 2022. Findings: The result of this study is that firm size do not strengthen the board independence, board remuneration, board financial and industry expertise, and number meeting board of director on fraudulent financial statement. However, firm size strengthens the CEO financial and industry expertise on fraudulent financial statement. Another result is CEO financial and industry expertise, board financial expertise has a negative influence on fraudulent financial statement, but board independence, board remuneration, board industry expertise and board effort do not have influence on fraudulent financial statement. Practical and Theoretical contribution/Originality: This research is expected to be helpful to the companies regarding the importance of the characteristics of the board of directors whether in large and small companies to prevent and detect fraudulent financial statements. Research Limitation: This limitation is focused only on mining sector companies, and it only measures the characteristic board of directors’ variables.
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Al-Qatanani, Nisreen, and Youssef Abu Siam. "Can ownership structure and board characteristics affect firm performance?" Accounting 7, no. 6 (2021): 1325–30. http://dx.doi.org/10.5267/j.ac.2021.4.006.
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This research aimed to examine the association between board of directors’ characteristics as a composite measure, the performance of companies in Jordan and the influence of family ownership on this association. Using data on industrial companies indexed on the Amman Stock Exchange (ASE) from 2013 to 2017, a positive association between board characteristics and company performance was found, indicating that higher board effectiveness is associated with more effective monitoring of management behavior. In addition, the association between board characteristics and company performance was strong when there was an interaction with family ownership, as companies with boards with family members achieve higher performance than companies with boards run by external directors. The study findings could be useful to all regulators seeking to improve the quality of monitoring mechanism practices, especially in emerging economies.
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Omer, Waddah Kamal Hassan, and Adel Ali Al-Qadasi. "Board of directors’ effectiveness and monitoring costs." Managerial Auditing Journal 35, no. 4 (October 29, 2019): 477–97. http://dx.doi.org/10.1108/maj-01-2019-2153.
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Purpose Responding to the call for research into the behavior of family companies to provide better understanding of corporate governance, this paper aims to examine the impact of boards’ effectiveness on the investment in monitoring costs (i.e. audit fees, internal audit function budget and executive remuneration) and how this relationship is moderated by family control. Design/methodology/approach A sample of 2,176 firm-year observations of Malaysian listed companies is used. The ordinary least square regression is used to examine the associations. Additional sensitivity tests are performed. Findings The study finds that there is no relationship between boards’ effectiveness and the demand for monitoring costs for the full sample. However, the findings of sub-samples (family and non-family companies) indicate that a family company with an effective board is less likely to invest more in monitoring, suggesting that the complementary association between the board’s effectiveness and investment in monitoring is a more dominant relationship than the substitution relationship in non-family companies. These findings show that the boards of directors of Malaysian family companies perform a deficient monitoring role, where the presence of family controlling shareholders in management may reduce their independence and efficiency in performing their monitoring role. The findings remain robust after performing additional sensitivity tests. Originality/value This paper contributes to the literature on corporate governance in a unique setting (family companies), where conflict of interest is created between controlling insiders and minority shareholders (Type II agency problem). It provides insight for Malaysian policymakers in assessing the issue of expropriation in family companies and enhancing the policy related to its boards.
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Blazhenko, T. "Participation of an independent member of the supervisory board (board of directors) in corporate governance: comparative legal research." Analytical and Comparative Jurisprudence, no. 6 (December 16, 2024): 301–5. https://doi.org/10.24144/2788-6018.2024.06.48.
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The article analyzes the institution of an independent member (independent non-executive director) of the supervisory board (board of directors) of a joint-stock company in the USA, Great Britain and China. It is concluded that UK corporate law does not contain clear criteria for differentiating nonexecutive from executive directors. Therefore, independent non-executive directors have the same duties and are legally liable as executive board members. They are subject to the duties of directors contained in the Companies Act. British law emphasizes the non-executive director’s independence from the company and its management, rather than the non-executive director’s dependence on the shareholders. The article systematizes a set of legal acts that are the sources of legal regulation of the US independent directors, namely: 1) listing standards of stock exchanges (New York Stock Exchange and Nasdaq); 2) regulatory acts of the Securities and Exchange Commission; 3) laws of the state where stock corporation is registered. Attention is paid to legal regulation in China. The author notes that the existing system of regulating the legal status of an independent director actually does not fulfill the functions assigned to an independent director. Chinese corporate governance system should be aimed at limiting the power of management and better protecting the interests of minority shareholders. However, its role is not adequately fulfilled because Chinese listed companies are usually controlled by a single majority shareholder. The author concludes that two types of independent directors have spread in world practice: the American one, in accordance with which the position of an independent director is established in a mandatory manner in corporate law; English, according to which the norms regarding the independent director are of a recommendatory nature, taking into account the principle «comply or explain». It is concluded that there are no single criteria for the concept of independence in the law of the studied countries, as well as a list of requirements for independent executive directors. Thus, the independence of an independent director remains a subjective category, and the evaluation criteria are formed based on the socio-economic conditions of the country.
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Witono, Banu, Widowati Dian Permatasari, and Dewita Puspawati. "Accounting Conservatism: Gender Diversity Accounting Conservatism: Gender Diversity and Educational Background on the Board of and Educational Background on the Board of Directors and Commissioner." Riset Akuntansi dan Keuangan Indonesia 8, no. 1 (May 26, 2023): 72–82. http://dx.doi.org/10.23917/reaksi.v8i1.22641.
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This research aimed to analyze the effect of the board director’s characteristics and the board of commissioners toward accounting conservatism. The characteristics analyzed in this research were size, gender, and educational background that affect their behavior in dealing with issues related to accounting principles. This research will be conducted by analyzing all companies listed on the Indonesia Stock Exchange in 2017-2019 using SPSS. Data was analyzed as 112 data using multiple regression analysis. The results show that both size of directors and commissioner’s and women of board director and commissioners affect the accounting conservatism. However, the educational background of board directors and commissioners does not affect accounting conservatism.
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Garg, Ajay Kumars. "Influence of Board Size and Independence on Firm Performance: A Study of Indian Companies." Vikalpa: The Journal for Decision Makers 32, no. 3 (July 2007): 39–60. http://dx.doi.org/10.1177/0256090920070304.
Full textAbstract:
Corporate governance issues have attracted a good deal of public interest because of their apparent importance for the economic health of corporations and society in general, especially after the plethora of corporate scams and debacles in recent times. Corporate governance issues flow from the concept of accountability and governance and assume greater significance and magnitude in the case of corporate form of organization where the ownership and management of organizations are distanced. And, it is in this context that the pivotal role played by the board of directors in maintaining an effective organization assumes much importance. A major part of the debate on corporate governance centres around board composition especially board size and independence. Various committees have mandated a minimum number of independent directors and have given guidelines on board composition. However, the relationship of board characteristics such as composition, size, and independence with performance has not yet been established. This paper addresses this question: Does the board size and independence really matter in terms of influencing firm's performance? The findings suggest that: There is an inverse association between board size and firm performance. Different proportions of board independence have dissimilar impact on firm performance. The impact of board independence on firm performance is more when the board independence is between 50 and 60 per cent. Smaller boards are more efficient than the larger ones, the board size limit of six suggested as the ideal. Independent directors have so far failed to perform their monitoring role effectively and improve the performance of the firm. The guidelines on corporate governance should take into account the ‘cross-board’ phenomenon while defining the criteria for eligibility for appointment as an independent director. Lack of training to function as independent directors and ignorance of the procedures, tasks, and responsibilities expected of them could be reasons for the independent directors' non-performance. A bad performance leads to an increase in board size, which in turn, hampers performance. Guidelines are provided for future studies to include different variables to see which board composition is suitable for different companies at different stages of life cycle.