Journal articles on the topic 'Board performance'
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1
Kuoppamaki, Miika. "Concepts of Board Performance: Review of Performance Metrics in Boards Research." Journal of Management and Strategy 9, no. 3 (June 20, 2018): 41. http://dx.doi.org/10.5430/jms.v9n3p41.
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This paper discusses concepts of board performance. Long traditions exist for using corporate financial metrics as indicators of board performance. I argue that a financial perspective alone is insufficient and sometimes misleading, and thus suggest addition of alternative measurement concepts.Arguments are based on analysis of extant research on boards and board directors. The concepts proposed in this paper are building on strategic review of board research articles in main international academic journals. I conclude from the research that board performance should be measured based on how boards are contributing to value creation. It was illustrated though the review that value creation takes place in intermediate steps and that board performance should be measure accordingly.
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Dato, Muluneh Hideto, Roy Mersland, and Neema Mori. "Board committees and performance in microfinance institutions." International Journal of Emerging Markets 13, no. 2 (April 16, 2018): 350–70. http://dx.doi.org/10.1108/ijoem-08-2016-0216.
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Purpose The purpose of this paper is to empirically relate subordinate board structures with improved financial and social performance in microfinance institutions (MFIs). Design/methodology/approach The research question is analyzed using a panel data from 23 MFIs in Ethiopia over a period of 2006-2011. Random effects panel data estimation is applied to analyze the link between board committees and MFI’s performance. Findings In MFIs with larger than average boards, the findings demonstrate significant ties between financial and outreach performance and how their boards are structured. The structure of board committees moderates the relation between board size and financial and outreach performance measures. Importantly, board committee benefits MFIs through better operational self-sufficiency, lower operating expenses, greater outreach to customers, and outreach to poorer customers using average loan size as the proxy. Practical implications Practitioners within microfinance sector, and those operating in advisory and regulatory roles to the sector could benefit from the argument advanced in the paper in that normative recommendation to restructure boards or establish committees requires reevaluating the board characteristics vis-à-vis the optimal monitoring, controlling, and advising needs of the institution. Originality/value Prior literature focuses on who sits on boards, how large are the boards, and how independent are they. This paper advances the understanding of the structure of board committees and how this may affect the performance of MFI. This approach provides better representation of director’s role and is thereby a good test of board effectiveness.
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Berezinets, Irina, Yulia Ilina, and Anna Cherkasskaya. "Board structure, board committees and corporate performance in Russia." Managerial Finance 43, no. 10 (October 9, 2017): 1073–92. http://dx.doi.org/10.1108/mf-11-2015-0308.
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Purpose The purpose of this paper is to investigate the link between board structure and performance of public companies in Russia – an emerging market with unique institutional background and a variability of corporate governance (CG) practices across its companies. Design/methodology/approach Panel data analysis was applied on a sample of 207 Russian companies that frequently traded in the Russian Trading System during the period 2007-2011, in order to test hypotheses on the relationships between board size, board independence, gender diversity, presence of board committees and financial performance, as measured by Tobin’s Q. Findings The results show a positive relationship between Tobin’s Q and the board’s gender diversity. The analysis demonstrates that smaller and bigger boards are associated with a greater Tobin’s Q value. Originality/value The findings provide additional evidence of how board structure is related to its effectiveness and corporate performance in countries with concentrated ownership, highly variable CG practices and a lack of proper implementation of corporate law and governance codes. The paper contributes to the existing empirical evidence on the advantages of small and large-sized boards and on gender diversity, and is the first investigating the relationship between Russian companies’ board committees and market-based performance. The results regarding board independence and committees suggest that these mechanisms are still not widely recognized for their role in CG and company performance in Russia.
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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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de Villiers, Charl, Vic Naiker, and Chris J. van Staden. "The Effect of Board Characteristics on Firm Environmental Performance." Journal of Management 37, no. 6 (June 23, 2011): 1636–63. http://dx.doi.org/10.1177/0149206311411506.
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This study investigates the relationship between strong firm environmental performance and board characteristics that capture boards’ monitoring and resource provision abilities during an era when the natural environment and the related strategic opportunities have increased in importance. The authors relate the proxy for strong environmental performance to board characteristics that represent boards’ monitoring role (i.e., independence, CEO-chair duality, concentration of directors appointed after the CEO, and director shareholding) and resource provision role (i.e., board size, directors on multiple boards, CEOs of other firms on the board, lawyers on the board, and director tenure). The authors provide evidence consistent with both theories of board roles. Specifically, consistent with their agency theory–driven predictions, the authors find evidence of higher environmental performance in firms with higher board independence and lower concentration of directors appointed after the CEO on the board of directors. Consistent with resource dependence theory, they show that environmental performance is higher in firms that have larger boards, larger representation of active CEOs on the board, and more legal experts on the board. Their findings are generally robust to a number of sensitivity analyses. These findings have implications for managers, firms, shareholders, and regulators who act on behalf of shareholders, if they are interested in influencing environmental performance.
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Nkundabanyanga, Stephen Korutaro, Venancio Tauringana, and Moses Muhwezi. "Governing boards and perceived performance of secondary schools." International Journal of Public Sector Management 28, no. 3 (April 13, 2015): 221–39. http://dx.doi.org/10.1108/ijpsm-10-2014-0135.
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Purpose – The purpose of this paper is to report the results of a study carried out to determine the effect of governing boards on the performance of Ugandan secondary schools. Specifically, the study investigated whether governing boards (board role performance, finance committee role performance, board size, frequency of board meetings and board finance expertise) have an effect on the perceived performance of the schools. Design/methodology/approach – This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 271 schools out of which 200 responded. The data were analysed through ordinary least squares regression using Statistical Package for Social Scientists. Findings – The results suggest that board role performance, finance committee role performance, frequency of meetings and finance expertise of governing boards have a significant effect on the schools’ performance. Research limitations/implications – The authors measure some of the variables qualitatively and perceptively contrary to, for instance, the commonly used quantitative measures of performance, but process factors which are inherently qualitative in nature can better explain variances in secondary schools’ performance. Thus, in this study, the authors do not claim highly refined measurement concepts. More research is therefore needed to better refine qualitative concepts used in this study. The results too suggest that board and finance committee role performance and finance expertise of the board are more important for performance of a school than board size, and frequency of meetings which academics have been focusing on. These findings call for more research to validate the posited relationships. Practical implications – The results are important for governing board policy development; for example, in terms of prescribing the qualifications for schools’ governing board members and also finance committee board members. Originality/value – This study shows that one way to capture the influence of all governing boards’ roles including service role is to adopt a perception-based approach which asks respondents to what extent they think governing boards fulfil all their roles. Unlike previous studies which used proxies for board role performance such as proportion of non-executive directors and board size for monitoring and control and resource provision, the study incorporates proxies as well as perception-based measures of board role performance to determine if governing boards have a significant influence on the performance of Uganda secondary schools.
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Crow, Peter R., and James C. Lockhart. "How boards influence business performance: developing an explanation." Leadership & Organization Development Journal 37, no. 8 (November 7, 2016): 1022–37. http://dx.doi.org/10.1108/lodj-08-2014-0168.
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Purpose The purpose of this paper is to explore the relationship between boards and board activity and subsequent business performance, in the context of high-growth companies, through the lens of decision making and business performance. Design/methodology/approach A critical realist approach was used to conduct a longitudinal multiple-case study of two medium-sized, quasi-public high-growth companies. Data collection included first-hand observations of boards in session, semi-structured interviews with key actors and the inspection of board and company documentation. An iterative approach to analysis was used to gain an in-depth understanding of how the boards worked and how they sought to exert influence. Findings The paper provides empirical insight about board involvement in strategic management. A proactive involvement by boards in the strategy development process and assessment of strategic options, and a collaborative form of board involvement in strategic management together with management is indicated as being important if the board is to exert influence beyond the boardroom. A conceptual model of a collaborative form of board-management interaction is developed. Practical implications The paper provides guidance for boards, suggesting that a more direct level of involvement in strategic management by the board together with management may be material to improved business performance. Originality/value The paper responds to calls for more research on the relationship between boards and business performance. It contributes much-needed first-hand evidence from within the boardroom.
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Wang, Yi, and Antony Young. "Does firm performance affect board independence?" Corporate Board role duties and composition 6, no. 2 (2010): 6–19. http://dx.doi.org/10.22495/cbv6i2art1.
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This paper seeks to shed some light on the antecedents of board independence. Specifically, it attempts to test the conceptual frameworks which make different predictions about the effect of firm performance on the level of board independence. The results provide support for the perspective that appointing more independent members to the boards may merely represent firms’ attempts to comply with institutional pressures. It is found that higher blockholder shareholdings lead to lower independence on the board, and audit and remuneration committees. Moreover, larger firms have relatively more independent directors sitting on nomination and remuneration committees.
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McDonald, Heath, and Emma Sherry. "Evaluating Sport Club Board Performance: A Customer Perspective." Journal of Sport Management 24, no. 5 (September 2010): 524–43. http://dx.doi.org/10.1123/jsm.24.5.524.
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When assessing board performance, customers are often overlooked as a stakeholder group. Yet, dissatisfied customers have successfully acted to have boards removed, and we have seen this scenario occur repeatedly among professional sport organizations governed by boards. The purpose of this research was to identify the factors affecting customer perceptions of sport club board performance, and guide organizations in the management of those perceptions. After extensive qualitative research, over 20,000 season ticket holders (STHs) from 14 different professional sport clubs were surveyed. The results suggest that a combination of overt performance measures (e.g., profits) and subjective, nonfinancial measures (e.g., feelings of inclusion) are used by customers to assess sport boards. Overall perceptions of the board directly influence customer satisfaction, and are strongly correlated with on-field performance and customer inclusion, suggesting boards are perceived to have a role to play in both areas. Perceptions of board performance are, therefore, worth managing in a holistic manner, balancing strong financial and club management with a particular emphasis on inclusive practices.
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Eklund, Johan, Johanna Palmberg, and Daniel Wiberg. "Ownership structure, board composition and investment performance." Corporate Ownership and Control 7, no. 1 (2009): 120–30. http://dx.doi.org/10.22495/cocv7i1p11.
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This paper explores the relation between ownership structure, board composition and firm performance among Swedish listed firms. The descriptive statistics show that Swedish board of directors has become more diversified in terms of gender. The analysis shows that board size has a significant negative effect on investment performance. Gender diversity has a small but negative effect on investment performance, and the same holds for CEO being on the board. When incorporating all the explanatory variables into the same equation the negative effect of larger boards dilutes the effect of gender diversity and having the CEO on the board.
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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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Siciliano, Julie I. "Board involvement in strategy and organisational performance." Journal of General Management 30, no. 4 (June 2005): 1–10. http://dx.doi.org/10.1177/030630700503000401.
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In firms where oversight by a regulatory body within the industry exists and where new core competencies must be developed to offset aggressive competition, there is evidence that a larger role for board of director involvement in strategic activities occurs. Within this context, survey data from board members and CEOs reveal that in organisations where financial soundness scores are less favourable, the odds of the board being more involved in a formal strategic planning process increase. Regarding a strategy role that consists of the board collaborating with management in making new strategic decisions, it is less likely that the board will take on this role when the organisation's financial soundness scores are not at the optimal level. For many years, boards of directors have been encouraged in theory and in practice to take on an active strategy role. However, in much of the literature the nature and extent of board involvement in strategy is undifferentiated. Most empirical studies dealing with corporate governance issues focus on board composition and structure variables and do not examine the level of involvement from a decision making perspective. Capturing this particular perspective is not only of interest to researchers but also is of practical importance, as general management seeks to realise the board's full potential in the strategic arena. This paper reports on the involvement of boards in a five-step strategic planning process and also examines board participation relative to that of senior management in strategic decision-making and evaluation. The first section examines the limited empirical findings of board involvement in strategic activities and outlines three viewpoints on possible participation levels. The paper then describes an empirical study that shows board involvement varies in relation to the organisation's financial performance.
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Lee, Sharon. "Women on the Board: Diversity and Firm Performance." Journal of Finance Issues 8, no. 2 (December 31, 2010): 150–58. http://dx.doi.org/10.58886/jfi.v8i2.2330.
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While there have been significant increases in recent years in the independence level on boards due to stricter regulations, there have been modest increases in women and minority board memberships. Women directors have accounted for 15% of all directors sitting on S & P 500 firms and just 9% for small-cap firms the last few years. Several recent studies have examined the possible relationship between the size and composition of the board of directors and firm performance. Specifically, a study of S & P 500 firms (Lee, Carlson 2008) shows that firms with relatively higher levels of independence on their boards perform significantly better. Adams and Ferreira (2009) conclude that gender diversity is helpful only for firms with weak governance. Is the board more effective when there is an inclusion of different views and perspectives? This study reports the inclusion of women on the board in different economic sectors and examines the possible effects of board gender diversity on firm performance.
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Nowland, John. "Measuring Board of Director Performance: An Overview and Future Research Opportunities1." Asian Journal of Accounting Research 1, no. 2 (August 31, 2016): 39–43. http://dx.doi.org/10.1108/ajar-2016-01-02-b001.
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This article provides a brief overview of the literature on board of director performance, highlighting the difficulties in attempting to directly measure the performance of boards of directors and how various studies have tackled this challenge. As an illustration, I show that two current measures of board of director performance, board meeting activity and director attendance, suggest that the boards of Asian firms do not compare favorably to the boards of firms from developed markets. Suggestions for future research on the performance of corporate boards are provided, as well as implications for board of director practices in Asia.
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Bhattacharya, Debarati, Ya-Yun Kao, and Wei-Hsien Li. "Industry Experiences of Board, CEO, and Acquisition Performance." Review of Pacific Basin Financial Markets and Policies 23, no. 03 (July 31, 2020): 2050022. http://dx.doi.org/10.1142/s0219091520500228.
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This study examines the collective impact of expert boards and CEOs on acquisition performance, providing new insight into the CEO–board relationship. Acquiring firms with expert boards earns an additional 1.16 percentage points (3.91 percentage points) when the CEOs are new to the target industry (also experts) compared to the firms with “nonexperienced” boards (expert boards alone). Robust to endogeneity checks, our evidence supports the “vigilant-advisor”, “resource-provisioning”, and “shared-experience” hypotheses that take three distinct views of the CEO–board relationship. Generalist CEOs and public targets intensify the shared-experience effect, whereas less powerful CEOs and private targets intensify the resource-provisioning effect. Experienced directors improve the quality of acquisitions by assisting acquirers to avoid large losses, identify targets with higher synergies, and negotiate better deals.
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Wang, Yi. "Are board meetings proactive or reactive to performance?" Corporate Board role duties and composition 4, no. 3 (2008): 6–15. http://dx.doi.org/10.22495/cbv4i3art1.
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The purpose of this paper is to investigate the relationship between the intensity of board activity, as represented by board meeting frequency, and firm financial performance, using data from the top 500 Australian companies. Firm performance measures include return on assets, return on equity and shareholder return; several control variables are introduced in the analysis. The results indicate that board meeting frequency has a positive impact on subsequent shareholder return. Regarding the explanatory factors for the level of board activity, it is reported that firms with more board committees tend to have relatively more board and committee meetings; firms with larger boards have less board meetings. In addition, lower managerial ownership leads to more committee meetings.
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Grofcikova, Janka, and Hussam Musa. "The impact of the board process on board and corporate performance: the case of Slovakia." Problems and Perspectives in Management 18, no. 2 (July 1, 2020): 366–81. http://dx.doi.org/10.21511/ppm.18(2).2020.30.
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Nowadays a great deal of attention is paid to corporate governance (CG). Frequent takeovers of ownership rights by management bodies led to a need for business owners to establish clear rules for business management and compliance monitoring. The aim of this paper is to examine the relationship between selected characteristics of the governance process and the ability of governing bodies to perform their core tasks, as well as to model and predict the impact of the selected characteristics of the governance process on the company’s financial performance, measured by the year-on-year change in return on equity. The respondent sample consists of members of randomly selected top management entities with their headquarters in Slovakia. A total of 132 subjects participated and answered questions in the survey, 54% of which were joint stock companies, 36% were limited liability companies and 10% were respondents from cooperatives. Data were personally collected by a questionnaire survey conducted during 2019. To verify the assumptions and success of the formulated model, correlation analysis, binary logistic regression and other relevant tests were used. The results show that each of the examined board process attributes significantly affects at least one board performance attribute. All significant correlations have a positive value. Independent variables in the ROE regression model increased the estimation rate of ROE change from 54.5% to 93.9%. The model is applicable in the CG practice and allows the prediction of changes in ROE with respect to ongoing governance processes. AcknowledgmentThis paper has been supported by the Scientific Grant Agency of Slovak Republic under the project VEGA No. 1/0749/18 “Research on the application of corporate governance principles in companies in Slovakia”. The authors would like to express their gratitude to the Scientific Grant Agency of The Ministry of Education, Science, Research and Sport of the Slovak Republic for financial support of this research and publication.
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Kim, Jootae, and Jai S. Kang. "Board Structure, Board Activity and Firm Performance: The Case of Korea." Journal of International Business and Economy 16, no. 2 (December 1, 2015): 40–63. http://dx.doi.org/10.51240/jibe.2015.2.3.
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In agency theory, it is asserted that boards with a high ratio of outside directors can monitor management effectively, but empirical results from past studies are not consistent. We suggest the “process perspective” as an alternative approach, arguing that the board activity, rather than the board structure, impacts the firm’s financial performance; and apply this perspective to Korean companies. We test the impact of board structure on both board activity and profitability, and then the impact of board activity on firm profitability. The test results were: the board structure [measured by the ratio of outside directors in the board membership] does not have positive influence on either board activity or profitability [measured by ROA] in Korean firms; however, the board activity, measured by the rate of outside directors’ participation in board meetings, has a positive relationship with a firm’s profitability. We explain this as a decoupling, based on institution theory, which occurred in the process of forced Korean governance reform of 1998.
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Graf, Andrea, and Markus Stiglbauer. "Board size and firm operating performance: Evidence from Germany." Corporate Board role duties and composition 5, no. 1 (2009): 37–47. http://dx.doi.org/10.22495/cbv5i1art4.
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Determining the optimum size of corporate boards is an important task for companies. Agency theory suggests that either too large or too small boards cause negative effects on firm operating performance. For a given sample of 113 listed firms in the German Prime market, we tested the effect of board size on return on assets and return on equity. Our findings provide evidence that there is a significantly negative Management Board size effect both on return on assets and return on equity. The results are consistent with the assumption of dysfunctional norms of behaviour within the German two-tier board structure.
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Syahraini, Syahraini, Saparudin Siregar, and Sugianto Sugianto. "SHARIA BANK CORPORATE GOVERNANCE BASED ON MAQASHID SHARIA." International Journal of Economic, Business, Accounting, Agriculture Management and Sharia Administration (IJEBAS) 1, no. 2 (December 26, 2021): 397–403. http://dx.doi.org/10.54443/ijebas.v1i2.138.
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This study aims to determine the effect of Good Corporate Governance as measured by the number of sharia supervisory boards, sharia supervisory board meetings, the number of boards of directors, board of directors meetings, the number of commissioners, board of commissioners meetings on the performance of maqashid sharia. The results of this study indicate that the variable meeting the board of directors has a significant effect on the performance of maqashid sharia. While the variable number of sharia supervisory board, sharia supervisory board meeting, number of board of directors, number of board of commissioners and board of commissioners meeting on maqashid sharia performance.
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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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Galbreath, Jeremy. "Are boards on board? A model of corporate board influence on sustainability performance." Journal of Management & Organization 18, no. 4 (July 2012): 445–60. http://dx.doi.org/10.1017/s1833367200000699.
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AbstractExisting research on a board-of-director–sustainability performance relationship have largely examined inside directors, outside directors, and gender diversity – yet empirical results have yet to offer any definitive answers. I posit that this previous research lacks a thorough examination of the role of boards and the means and mechanisms by which they influence performance. Drawing on the board capital perspective and the role of boards, this paper develops a model that highlights the influence of board capital on the future sustainability performance of firms. The model takes into account specific types of human and social capital of outside directors which have previously been unexamined. Beyond the board capital perspective, an argument is put forth that values are largely neglected in the examination of boards of directors, but are necessary in the study of sustainability because of its normative implications. I therefore account for the value attunement concept as a moderating variable in the model. The paper draws on corporate governance and business ethics' literature to generate propositions and offer original insight into the drivers of sustainability performance in organizations.
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Galbreath, Jeremy. "Are boards on board? A model of corporate board influence on sustainability performance." Journal of Management & Organization 18, no. 4 (July 2012): 445–60. http://dx.doi.org/10.5172/jmo.2012.18.4.445.
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AbstractExisting research on a board-of-director–sustainability performance relationship have largely examined inside directors, outside directors, and gender diversity – yet empirical results have yet to offer any definitive answers. I posit that this previous research lacks a thorough examination of the role of boards and the means and mechanisms by which they influence performance. Drawing on the board capital perspective and the role of boards, this paper develops a model that highlights the influence of board capital on the future sustainability performance of firms. The model takes into account specific types of human and social capital of outside directors which have previously been unexamined. Beyond the board capital perspective, an argument is put forth that values are largely neglected in the examination of boards of directors, but are necessary in the study of sustainability because of its normative implications. I therefore account for the value attunement concept as a moderating variable in the model. The paper draws on corporate governance and business ethics' literature to generate propositions and offer original insight into the drivers of sustainability performance in organizations.
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Aliyu, Abubakar Biu, Onipe Adabenege Yahaya, and Nma Ahmed Mohammed. "Board features and financial performance of Nigerian banks." International Journal of Finance & Banking Studies (2147-4486) 10, no. 1 (February 13, 2021): 11–19. http://dx.doi.org/10.20525/ijfbs.v10i1.1003.
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The presence of contradictory theories and unpredictable empirics calls for this paper to survey the outcome of board traits on financial operation of Nigeria banks. Financial performance of a firm is as important as the firm. Yet, very few studies have examined its impact by the board of directors in Nigeria. Data were obtained and perused using descriptive and inferential figures. Findings show that size of board has significant and constructive bearing on business piece. However, board composition takes undesirable significance. Meetings of board and gender failed to show significance. But, board member nationality and firm size show negative and significant effects. We added by exploring impacts of boards on financial performance. We asked firms to increase the size of the board and engage more independent directors and reduce the number of board diligence and size of the firm. The strong plus impact of board size and firm size on financial operations is an interesting result allowing for additional interrogation of why these behaviours.
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Lee, Sharon. "Board Independence and Firm Performance: Case of Small-Cap Firms." Journal of Finance Issues 6, no. 2 (December 31, 2008): 187–95. http://dx.doi.org/10.58886/jfi.v6i2.2398.
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Many changes in the size and composition of corporate boards of directors have occurred since the enactment of the 2002 Sarbanes-Oxley Act (SOX). With the new regulations, we have seen an increase in the number of independent board members and a decrease in the average size of boards. A recent study of S & P 500 firms [Lee, Carlson, 2007] shows that firms with the most independent boards perform significantly better than firms with less independent boards. Studies before the enactment of SOX found a significant inverse relationship between board size and firm performance. However, this relationship is not found in this study. In smaller firms, the goals of management and shareholders may be more aligned than that in larger firms such as the S & P 500. It is possible that the objective monitoring from a more independent board is not a significant factor in the performance of smaller firms. This study includes small-cap firms and examines the relationship between board independence and firm performance in small-cap firms.
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Brown, Jill A., Ann Buchholtz, Marcus M. Butts, and Andrew J. Ward. "Board Socio-Cognitive Decision-Making and Task Performance Under Heightened Expectations of Accountability." Business & Society 58, no. 3 (November 7, 2016): 574–611. http://dx.doi.org/10.1177/0007650316675597.
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This study examines how heightened expectations of board responsibility and accountability affect the socio-cognitive decision-making of boards and their collective task performance. Using data from the directors of 60 boards who served before and after the enactment of Sarbanes–Oxley, this study provides insight into the potential negative impact that this tightened accountability environment can have on a board’s task performance. Examining several socio-cognitive elements of board decision-making, board authority is found to have a positive main effect on board task performance, while relative CEO power and affective conflict have curvilinear relationships with board task performance. Cohesiveness also moderates the relationship between a board’s perceived uncertainty and affective conflict with board task performance. In sum, the model shows how a new era of director accountability can affect the social cognitions of board decision-making that underlie board task performance.
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Tulung, Joy Elly, and Dendi Ramdani. "Independence, size and performance of the board: An emerging market research." Corporate Ownership and Control 15 (2018): 201–8. http://dx.doi.org/10.22495/cocv15i2c1p6.
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The purpose of this article is to find the link between board independence, board size and BPD (regional development bank) performance for describing the corporate governance in regional development bank. The sample of firms consists all 26’s BPD in Indonesia in the period 2010-2014; we take secondary data from the annual report of each BPD, total 203 top executives who are members of the boards of all BPD in Indonesia. The results are the influence of the board independence and board size on the BPD performance. The sample employed all the members of the boards of BPD in Indonesia giving us a confidence in generalization our findings. The statistical method used to test the hypotheses is OLS regression. This method was applied to measure the relationship between board independence, board size and BPD performance. The results suggested that there is a positive relationship between board independence, board size and BPD performance.
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Belhaj, Salma, and Cesario Mateus. "Corporate governance impact on bank performance evidence from Europe." Corporate Ownership and Control 13, no. 4 (2016): 583–97. http://dx.doi.org/10.22495/cocv13i4c4p8.
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This paper investigates the impact of corporate governance on European bank performance during the period 2002-2011. Using a sample of 73 banks from 11 European countries, we examine the relationship between corporate governance measures more specifically the board size and composition, the gender diversity and the CEO duality on the European bank performance. During the period 2002-2011, our results show that the board size and the gender diversity have a positive and significant impact on bank performance. Large board of directors with more female members led to better bank performance, whereas, the board composition and the CEO duality have no significant effect in explaining the bank performance for the European countries. During the global financial crisis, our findings show that the board size and the board composition are negatively and significantly correlated to the bank performance. Smaller boards of directors with less number of independent (non-executive) directors have outperformed the ones with larger boards and more independent directors during the crisis. However, the gender diversity and the CEO duality have no significant impact on the European bank performance.
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Giannetti, Mariassunta, and Mengxin Zhao. "Board Ancestral Diversity and Firm-Performance Volatility." Journal of Financial and Quantitative Analysis 54, no. 3 (September 14, 2018): 1117–55. http://dx.doi.org/10.1017/s0022109018001035.
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We proxy for board members’ opinions and values using directors’ ancestral origins and show that diversity has costs and benefits, leading to high performance volatility. Consistent with the idea that diverse groups experiment more, firms with ancestrally diverse boards have more numerous and more cited patents. In addition, their strategies conform less to those of the industry peers. However, firms with greater ancestral diversity also have more board meetings and make less predictable decisions. These findings suggest that diversity may lead to inefficiencies in the decision-making process and conflicts in the boardroom.
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Shivan Sarpal and Fulbag Singh. "Board Size and Corporate Performance: An Empirical Investigation." Think India 16, no. 1 (January 14, 2013): 1–8. http://dx.doi.org/10.26643/think-india.v16i1.7823.
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The subject of corporate governance has always been of keen interest to the researchers in the area of management and finance. This paper basically concentrates on the corporate board of directors which is an internal corporate governance mechanism. Since the effectiveness of boards counts on several characteristics such as board size, board composition, leadership structure etc, therefore considering this viewpoint, the present study is based on the analysis of board size of BSE listed companies in India. This analysis broadly embraces the relationship between board size and performance as represented by various indicators such as Operating Profit Margin, Return on Assets, Return on Equity, Earnings per Share and Tobin’s Q. Spearman’s rho correlation, One Way ANOVA and Kruskal-Wallis tests were applied to draw the inferences. Results of the study remained robust and thus concluded that both board size and firm performance were independent of each other as board size was not found to be associated with firm performance.
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Wan, David, and C. H. Ong. "Board Conflict, Board Performance and Firm Performance in Singapore Listed Companies." Indian Journal of Corporate Governance 3, no. 2 (July 2010): 90–109. http://dx.doi.org/10.1177/0974686220100201.
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Board of directors deal with complex, strategic issues and conflict among members is natural. Group conflict is often associated with reduced productivity and lower cohesiveness. However, conflict might also improve group decision making and governance practices. This paper seeks to examine the relationship among the following: (a) three types of conflict (cognitive, affective and process) and board performance; (b) board performance and firm performance; and (c) the mediating role of board performance on board conflict and firm performance. It was found that only cognitive conflict is (positively) related to board performance. In addition, board performance does not impact firm performance nor board performance mediates the relationship between board conflict and firm performance.
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Kanadlı, Sadi Boğaç, Pingying Zhang, and Nada K. Kakabadse. "How job-related diversity affects boards’ strategic tasks performance: the role of chairperson." Corporate Governance: The International Journal of Business in Society 20, no. 4 (April 15, 2020): 583–99. http://dx.doi.org/10.1108/cg-08-2019-0267.
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Purpose Board diversity has been a hotly debated topic in the field of corporate governance. The paper examines the role of board chairperson and its moderating effect on the relationship between job-related diversity and boards’ strategic tasks performance. The purpose of this paper is to add on our body of knowledge about the impact of job-related diversity on boards’ strategic tasks performance. Design/methodology/approach The paper applies the structural equation modeling (SEM) technique to examine survey responses from chief executive officers (CEOs). Both the measurement model and structural model have obtained good results, supporting the appropriateness of using the SEM approach. Findings The findings suggest that there is a positive association between job-related diversity and boards’ strategic tasks performance, which is moderated by a chairperson’s leadership efficacy and the option of a former-CEO as board chair. Practical implications To achieve the intended effect of job-related diversity in boards, policymakers need to be mindful about the importance of the board chairperson. Board chairperson’s characteristics such as leadership efficacy and a former-CEO experience would amplify the positive effect of diversity. Originality/value This research paper contributes to the literature on board diversity, board leadership and strategic management of firms. Findings validated researchers’ concern about the negligence of examining moderating factors in board diversity research. Moreover, results echo the concern that board leadership research should shift the attention from structural aspects to the behavioral issues. Finally, this study is the first to show the positive influence of a board chairperson in disseminating benefits of a diverse board.
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Duncan-Marr, Alison, and Stephen J. Duckett. "Board self-evaluation: the Bayside Health experience." Australian Health Review 29, no. 3 (2005): 340. http://dx.doi.org/10.1071/ah050340.
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Board evaluation is a critical component of good governance in any organisation. This paper describes the board self-evaluation process used by Bayside Health, a public health service in Melbourne. The question of how governing boards can assess their performance has received increasing attention over the past decade. In particular, the increasing demand for accountability to shareholders and regulators experienced by corporate sector Boards has resulted in greater scrutiny of board performance, with the market and the balance sheet providing some basis for assessment.1-3 Performance evaluation of governing boards in the public sector has been more challenging. Performance evaluation is complex in a sector that is not simply driven by the bottom line, where the stakeholders involve both government and the broader community, and where access to, and the quality and safety of the services provided, are often the major public criteria by which performance may be judged. While some practices from the corporate sector can be applied successfully in the public sector, this is not always the case, and public sector boards such as the Board of Directors of Bayside Health have been developing ways to evaluate and improve their performance.
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OBENG, KOFI, and ISAIAH O. UGBORO. "A Study of the Activities and Roles of Public Transit Boards." Transportation Journal 44, no. 3 (2005): 51–76. http://dx.doi.org/10.2307/20713606.
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Abstract This study examines public transit boards of directors' role performance, prescribed activities that facilitate role performance, relationships between the roles and prescribed activities, and characteristics of boards and their members that affect members' involvement in board activities. It surveys public transit boards and analyzes the resulting data, using factor analysis, structural, and stepwise regression equations. The study finds that transit boards' role performance is enhanced by board members' involvement in contextual, analytical, strategic, interpersonal, and political activities, but not by involvement in board educational activities. Additionally, it finds positive relationships between many of the board member characteristics examined and most of the prescribed board activities. Exceptions to these positive relationships are also revealed. Negative relationships exist between the level of formal education of board members and such activities as setting aside time to learn about the organization and discussing future directions of the organization with other board members. Appointment of board members by state governments exerts a negative effect on board members' attentiveness to decision-making processes, and the use of long-range plan priorities in making strategic decisions. Service on other boards negatively affects members' involvement in transit board-related interpersonal activities.
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OBENG, KOFI, and ISAIAH O. UGBORO. "A Study of the Activities and Roles of Public Transit Boards." Transportation Journal 44, no. 3 (2005): 51–76. http://dx.doi.org/10.5325/transportationj.44.3.0051.
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Abstract This study examines public transit boards of directors' role performance, prescribed activities that facilitate role performance, relationships between the roles and prescribed activities, and characteristics of boards and their members that affect members' involvement in board activities. It surveys public transit boards and analyzes the resulting data, using factor analysis, structural, and stepwise regression equations. The study finds that transit boards' role performance is enhanced by board members' involvement in contextual, analytical, strategic, interpersonal, and political activities, but not by involvement in board educational activities. Additionally, it finds positive relationships between many of the board member characteristics examined and most of the prescribed board activities. Exceptions to these positive relationships are also revealed. Negative relationships exist between the level of formal education of board members and such activities as setting aside time to learn about the organization and discussing future directions of the organization with other board members. Appointment of board members by state governments exerts a negative effect on board members' attentiveness to decision-making processes, and the use of long-range plan priorities in making strategic decisions. Service on other boards negatively affects members' involvement in transit board-related interpersonal activities.
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Barone, Gerhard, Kent Hickman, and Mark Shrader. "Board Changes in Response to Extremes in Performance." Journal of Finance Issues 10, no. 2 (December 31, 2012): 24–29. http://dx.doi.org/10.58886/jfi.v10i2.2310.
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This study contrasts changes in board structure in firms at the extremes of industryadjusted performance. We find pervasive changes in board size, composition, and director pay for firms whose stock market performance ranks in the uppermost and lowest deciles of industryadjusted returns over the period 2001-2005. Our evidence shows that these companies tended to change their board’s size, added outsiders to the board, and increased director pay. Significant differences between the two groups are documented, with poor performers making more dramatic changes in all three of these governance metrics. We failed to find changes in other structural characteristics such as classified boards and shareholdings of directors.
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Oyieke, Samuel Ojwang'. "Firms’ Financial Performance and Corporate Board Diversity: Evidence from Kenya **." Journal of Corporate Governance, Insurance, and Risk Management 3, no. 3 (November 30, 2016): 1–18. http://dx.doi.org/10.56578/jcgirm030301.
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Boards’ affects performance through their monitoring and advising functions. The ability to perform these functions depends on among other things, the experience of the board. This paper examines the effects of corporate board experience on firms’ financial performance of listed companies in the Nairobi Securities Exchange for the period 2001-2010 using System GMM. Performance variables are ROA, Tobin’s Q ratio, share price and price to book value. Experience is measured as stock of initial experience and tenure in a particular board. Tenure is found to be positively and significantly associated with the performance variables. Tenure ^2 captures the entrenchment behavior of the board. This entrenchment effect has a significantly negative effect on performance. This negative effect eventually outweighs the positive tenure effect and gives rise to the downward effect of tenure on performance hence the inverted U-relationship between tenure and performance. The study reports an optimal tenure of between 7 and 8 years depending on the performance variable being considered. At shorter tenure; there is a positive effect on performance, but at a longer tenure, entrenchment behavior of the veteran board members outweighs the monitoring effect. In fact these long tenured boards become ‘zombie boards’, thus negatively affecting performance. Stock of initial experience consists of education, and past managerial experience. It has a significant positiverelationship with performance.
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Lee, Sharon Kay, William Bosworth, and Franklin Kudo. "Compensation committees: independence and firm performance." Managerial Finance 42, no. 1 (December 31, 2015): 23–33. http://dx.doi.org/10.1108/mf-10-2015-0263.
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Purpose – Recently all major stock exchanges issued a requirement that listed companies have 100 percent independence on audit committees of the board of directors but now the focus has turned to compensation committees. Does 100 percent independence on compensation committees make a difference in firm performance? The paper aims to discuss these issues. Design/methodology/approach – Only 1 percent of the S & P 1,500 firms are not in compliance with the new 100 percent independence requirement for compensation committees. This presents an opportunity to examine characteristics of these firms and if this noncompliance may harm firm performance. Industry-adjusted ROA and Tobin’s Q measures are collected as well as firm size, debt ratios, and the presence of a classified board. Findings – Findings are as follows: S & P 500 firms with lower levels of debt, have classified board, but do not perform significantly worse than firms in compliance in the same industry; mid-cap firms with debt levels similar to complying firms, have classified boards, and perform significantly worse, and lastly, small-cap firms with lower levels of debt, have classified boards, and perform significantly worse. Research limitations/implications – Results imply that non-complying mid-cap and small-cap firms may be protecting under-performing management through maintaining classified boards, low levels of debt to avoid scrutiny of the debt markets, and less objectivity (i.e. overall and committee independence) on boards. Originality/value – Existing corporate governance literature provides evidence that overall board independence may promote shareholder wealth maximization. The latest focus regarding independence has recently been on compensation committees. Should independence on compensation committees matter to shareholders? It is appears that noncompliance should matter in the case of small- and mid-cap firms.
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Mastella, Mauro, Daniel Vancin, Marcelo Perlin, and Guilherme Kirch. "Board gender diversity: performance and risk of Brazilian firms." Gender in Management: An International Journal 36, no. 4 (April 7, 2021): 498–518. http://dx.doi.org/10.1108/gm-06-2019-0088.
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Purpose This study aims to intend to check if female board representation affects performance and risk and to analyse the evolution of the demographic aspects of the presence of women on boards in Brazil. Design/methodology/approach The authors used a sample of 150 Brazilian publicly traded companies from 2010–2018, with different measures of firm performance, firm risk and women’s presence on the board. The study approach is based on a set of ordinary least squares, quantile and panel data regressions. Findings The presence of women on the board has a positive effect on all of our accounting and market performance measures. However, the result of the impact on risk is not conclusive. The study also found that the number of females on the board has a more significant effect at the lower levels of firm performance measured by return on equity, but at the higher levels when measured by Tobin’s Q. Regarding return on assets, the more significant effect happened on the extremes of the performance distribution. The study findings point that market investors place more value in female presence on the board than in director positions. Originality/value By estimating the impact of women’s presence on the boards of directors in firm performance and risk, this study aimed to verify this impact in different aspects of the company. In addition, the authors did so in a sample with many years, making it possible to evaluate the historical evolution of the feminine presence in the boards of administration as well as in the groups of directors, assisting Brazilian legislators with new evidence about the possible impacts of Draft Law 7179/2017.
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Scafarto, Vincenzo, Federica Ricci, Gaetano Della Corte, and Pasquale De Luca. "Board structure, ownership concentration and corporate performance: Italian evidence." Corporate Ownership and Control 15 (2017): 347–59. http://dx.doi.org/10.22495/cocv15i1c2p4.
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This paper investigates the interplay between board-level governance characteristics, ownership concentration and firm performance in the Italian corporate landscape, which is characterized by high (though varying) degrees of ownership concentration. The empirical setting of this study is the Italian stock market and specifically a sample of non-financial firms included in FTSE MIB and mid-cap index of Milan stock exchange, spanning a five-year time period from 2011 up to 2015. We regressed an accounting proxy for firm performance, namely the return-on-asset (ROA) ratio, on several board-level governance variables and specifically board size, board independence, CEO-chairman duality and audit committee (ACD) full independence. In doing so, we also controlled for the impact of different levels of ownership concentration by partitioning the sample into firms with lower and-higher-than-median values of ownership concentration (OC). The empirical results indicate that board characteristics differently impact performance in firms with lower levels of OC compared to firms with higher OC. Specifically, in lower-OC firms, board independence and AC full independence have a negative impact, whereas CEO duality (either alone or interacted with board independence) has a positive impact on performance. Conversely, higher-OC firms benefit from a large board size and are negatively affected by AC independence, while the remaining variables are not significant. The key insight to be gained from our evidence is that the individual and interaction effects of board-level mechanisms may be contingent on the presence of other governance mechanisms (in this instance, the degree of ownership concentration). As such, this research adds to the existing literature questioning the ‘one-size-fits-all’ approach to corporate boards. In terms of practical implications, our findings support the notion that firms might consider the potential interaction and substitution effects between governance mechanisms and structure boards accordingly.
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Martinez-Jimenez, Rocio, María Jesús Hernández-Ortiz, and Ana Isabel Cabrera Fernández. "Gender diversity influence on board effectiveness and business performance." Corporate Governance: The International Journal of Business in Society 20, no. 2 (January 11, 2020): 307–23. http://dx.doi.org/10.1108/cg-07-2019-0206.
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Purpose The purpose of this paper is to analyze the mediating role of board effectiveness (understood as the capacity to efficiently manage and control all functions to guarantee the company’s prosperity) in the relationship between board diversity and firm performance. Design/methodology/approach The authors use partial least squares methodology to test the direct and indirect relationships between gender diversity in boards of directors and business performance. Findings Although the relationship between the presence of women on the board and the board’s effectiveness is statistically significant, this relationship is negative. However, board effectiveness (measured by the three constructs: strategic control, organizational innovation and decision-making) has a positive and statistically significant effect on business performance. Finally, there is a positive, but not statistically significant, relationship between gender diversity and firm performance. Research limitations/implications The study has a small sample size, and most of the boards of directors analyzed are unequal with only a few companies achieving gender parity. Social implications Public institutions must promote actions to achieve a critical mass of women directors and managers, so that women transcend a merely “symbolic” role on a board and are able to develop their skills and characteristics, thereby improving a board’s effectiveness and business performance. Originality/value This paper makes a theoretical contribution to the diversity and governance literature by providing a better understanding of the relationship between board gender diversity and firm performance. It considers the influence of women on the board through a holistic framework, analyzing the mediating role of the board’s effectiveness.
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Hao, Qian, Nan Hu, Ling Liu, and Lee J. Yao. "Board interlock networks and the use of relative performance evaluation." International Journal of Accounting & Information Management 22, no. 3 (July 29, 2014): 237–51. http://dx.doi.org/10.1108/ijaim-06-2013-0039.
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Purpose – The purpose of this paper is to explore how networks of boards of directors affect relative performance evaluation (RPE) in chief executive officer (CEO) compensation. Design/methodology/approach – In this study, the authors propose that an interlocking network is an important inter-corporate setting, which has a bearing on whether boards decide to use RPE in CEO compensation. They adopt four typical graph measures to depict the centrality/position of each board in the interlock network: degree, betweenness, eigenvector and closeness, and study their impacts on RPE use. Findings – The authors find that firms that have more connected board members and whose board members are connected to better connected firms are more likely to reward their CEOs contingent on their peers’ performance, indicating that information transmission along the board interlock network facilitates the adoption of RPE. This result is robust to alternative measures for board interlock networks and various types of CEO compensation. It highlights the role of interlocking directorates in disseminating information and practice of RPE use along board network. Originality/value – The authors use social network analysis to measure the relationships and flows between the connected nodes and study the impact on executive compensation design.
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Zion, Uri Ben, and Garen Markarian. "Board Size, Crisis, and Firm Performance: Evidence from Banks." International Journal of Economics and Finance 10, no. 4 (March 3, 2018): 33. http://dx.doi.org/10.5539/ijef.v10n4p33.
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A large body of research has found conflicting results on the relation between board size and firm performance, where studies indicate that board size is positively, negatively, or is unrelated to firm performance. Using a global sample of 120,000 banks, this study extends the extant literature in a number of important ways: we find that an inverted U-curve characterizes the board size-performance relation, especially for publicly owned non-EU firms. Second, and in contrast, we find that the negative board size-performance correlation is explained by a rational risk-return relation, where small board firms are riskier and follow non-traditional banking strategies. Consequently, we find that banks with small boards performed poorly during the 2008 global credit crisis.
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Malimban, Ber-Riel, Glenn N. Ortiz, and Mark Joseph B. Enojas. "Mitigating board endorsement through re-spinning with surface-mounted device under test pad." Indonesian Journal of Electrical Engineering and Computer Science 26, no. 1 (April 1, 2022): 75. http://dx.doi.org/10.11591/ijeecs.v26.i1.pp75-85.
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The two-part legacy board device under test (DUT) pad has been very useful for testing of microelectronic packages. However, <span lang="EN-US">this board has been subjected to many repair endorsements due to open connection of DUT pad and cut traces of the board components as recorded. Board re-spin is used to improve the performance of the test boards in microelectronic packages production. It improves the board development to create more functional printed circuit boards for testing and introduces the use of modern tools and software applied to the schematic creation up to the production board debugging. This paper presents a method of creating test boards for the development and manufacturing of microelectronic packages and integrated circuits. The two-part board is converted into a single board interface which eliminates the open DUT connections. A surface-mounted DUT pad is introduced to replace the old hypertact pins which are included in the re-spin board for a more robust performance. The schematic creation and board debugging were done to lessen problems caused by connection faults. In result, producing re-spin boards mitigates board endorsement which in return increases the manufacturing output performance. A faster and convenient setup was achieved when the old two-board setup was </span>eliminated.
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Haldar, Arunima, Reeta Shah, and S. V. D. Nageswara Rao. "Gender diversity in large listed Indian companies." Corporate Ownership and Control 12, no. 3 (2015): 573–80. http://dx.doi.org/10.22495/cocv12i3c5p8.
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This paper aims to examine the effectiveness of gender diverse boards on financial performance in large listed Indian companies by taking a resource dependency perspective. Gender diverse board is measured by presence of the independent female director on the board. Further, financial performance is measured by the market performance measure taking Tobin’s Q. This relationship is examined by collecting information for eleven financial years from 2003 -13. Panel regression model is employed to assess the proposed relationship. The analysis confirms that independent gender diverse boards significantly affect financial performance. Another important revelation of the study is that the financial performance of company having gender diverse boards increases with board size
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Bonn, Ingrid. "Board Structure and Firm Performance: Evidence from Australia." Journal of Management & Organization 10, no. 1 (January 2004): 14–24. http://dx.doi.org/10.1017/s1833367200004582.
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ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.
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Bonn, Ingrid. "Board Structure and Firm Performance: Evidence from Australia." Journal of the Australian and New Zealand Academy of Management 10, no. 1 (January 2004): 14–24. http://dx.doi.org/10.5172/jmo.2004.10.1.14.
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ABSTRACTThe influence of corporate governance on firm performance has been discussed for a number of years, but mainly in a United States and European business context. This article investigates the composition of boards of directors in large Australian firms and analyses whether board structure has an impact on performance, as measured by return on equity and market-to-book value ratio. The results showed that outsider ratio and female director ratio were positively associated with firm performance, whereas board size and directors' age had no influence on firm performance.
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Karim, Sitara, Norlida Abdul Manab, and Rusmawati Binti Ismail. "Legitimising the Role of Corporate Boards and Corporate Social Responsibility on the Performance of Malaysian Listed Companies." Indian Journal of Corporate Governance 12, no. 2 (November 1, 2019): 125–41. http://dx.doi.org/10.1177/0974686219881092.
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The prime objective of this study is to investigate the legitimate role of corporate boards and corporate social responsibility on the performance of Malaysian listed companies during 2006–2017. Elements of corporate boards include board size, board independence and board diversity, whereas corporate social responsibility (CSR) dimensions constitute marketplace, environment, community and workplace. Both accounting-based (return on assets [ROA], return on equity [ROE]) and market-based (earnings per share [EPS]) performance measures have been employed for measuring performance. Pooled ordinary least squares method (OLS) and multiple regressions are used to estimate the dataset. Findings reveal larger board size and higher board independence positively affect firm performance and significantly legitimise the board role in firms. However, the presence of women on Malaysian corporate boards does not legitimate the performance due to their lower percentage on board, hence insignificantly affecting firm value. Additionally, out of four CSR dimensions, only marketplace is positively and significantly related to EPS and negatively and significantly related to ROA. Conversely, environment, community and workplace are insignificantly related to all performance measures, leaving firms in a questionable legitimate state. This study embraces support from agency theory, resource dependence theory, legitimacy theory and stakeholder theory. However, this research raises questionable insights for regulatory bodies and academicians in the form of corporate legitimacy.
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Lee, Kin-Wai, and Char-Lee Lok. "Busy Boards, Firm Performance and Operating Risk." Asian Academy of Management Journal of Accounting and Finance 16, no. 2 (December 23, 2020): 1–21. http://dx.doi.org/10.21315/aamjaf2020.16.2.1.
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Using a sample of listed firms in Malaysia, Philippines, Singapore and Thailand, this article examines the association between busy board of directors and firm performance. We offer three results. First, we find that firm performance (measured by operating profitability and market-to-book equity) is negatively associated with busy boards. Second, we find that firms with busy boards have higher operating risk (measured by volatility of return on assets, volatility of stock returns and volatility of operating cash flow). Third, we find that the association between firm performance and busy boards is conditional on the firm’s life cycle stage. For firms in the growth stage, busy boards are beneficial to firm performance suggesting that the experience knowledge and reputation accumulated with multiple directorships help busy directors to more effectively advise these firms. In contrast, for firms in the maturity stage of their life cycle, busy boards are detrimental to firm performance suggesting the monitoring role of board is weakened by multiple directorships.
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Mandala, Nebert, Erasmus Kaijage, Josiah Aduda, and Cyrus Iraya. "Gender Diversity of Boards, Board Composition and Firm Performance." European Scientific Journal, ESJ 13, no. 34 (December 31, 2017): 62. http://dx.doi.org/10.19044/esj.2017.v13n34p62.
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The broad objective of this research was to determine whether gender diversity of boards and board composition, affects performance. Secondary data was collected for a ten-year period from 2006 to 2015 from 98 sampled financial institutions. Multiple regression analysis and generalized estimating equations were used in analysis of the collected data. Parametric and nonparametric methodologies were used. The study was anchored on the agency theory, stakeholder theory, the human capital theory and resource dependence theory. The results show that, gender diversity of boards and board composition had no independent significant influence on performance of financial institutions. Through the study formulation of managerial policy and practice that promote better governance practices and appropriate firm characteristics that improve performance of financial institutions will be enhanced.