Board Capital, Board Members Incentives, and Firm Performance: Evidence from Firms Having Dual Class Share Structures

2011 ◽  
Author(s):  
Samer K. Khalil ◽  
Assem M. Safieddine
Keyword(s):  
Firm Performance ◽  
Board Members ◽  
Board Capital ◽  
Dual Class

scholarly journals Board Capital Effect on Firm Performance: Evidence from Indonesia

2021 ◽  
Vol 21 (1) ◽  
pp. 491-506
Author(s):  
Maria Kontesa ◽  
Andreas Lako ◽  
Wendy
Keyword(s):  
Human Capital ◽  
Firm Performance ◽  
Financial Distress ◽  
Board Members ◽  
Firm Level ◽  
Capital Theory ◽  
Strategic Resources ◽  
Board Capital ◽  
And Performance ◽  
High Level

Human capital effects have been ignored as important resources to induce the organization’s performance in firm-level research. The proponents of human capital theory and resource-based view theory argue that the human resources attached to each board member, such as networking, education, and experience, might induce the performance. Yet, agency theory argues those strategic resources might bring higher transaction costs and entrenchment costs. Therefore, this study aims to examine the board's capital effect on firm performance for a sample of 252 listed firms in Indonesia over 2011–2017. Using dynamic GMM panel regression, we confirm the hypothesis about board capital and performance. The results imply that board members’ networking and experience are two important factors for firm performance. However, boar members’ education does not give any impact. It confirms prior theories whereby the capability and competency of directors are an important source for the firm to achieve its objective. Networking and experience might help the firm to avoid financial distress. It furthers implies that shareholders should choose board members with a high level of networking and experience, not education.

A framework for board capital

2016 ◽  
Vol 16 (3) ◽  
pp. 452-475 ◽  
Author(s):  
Leticia Pérez-Calero ◽  
Ma del Mar Villegas ◽  
Carmen Barroso
Keyword(s):  
Social Capital ◽  
Human Capital ◽  
Firm Performance ◽  
Stock Exchange ◽  
Board Members ◽  
Board Density ◽  
Content Type ◽  
Board Capital ◽  
Complete Set ◽  
External Connections

Purpose The purpose of this paper is to examine in greater depth the concept of “board capital”, which the authors consider to be a bundle of three types of capital, and believe to be a clear antecedent of the board’s ability to perform its roles, which have positive consequences for the firm’s performance. Design/methodology/approach Through 83 firms listed on The Madrid Stock Exchange during the period 2005-2010, the authors test empirically the relationships between different dimensions of board capital and firm performance, and specially how internal social capital moderates the relationships between board human capital and external social capital with firm performance. Findings The results show that certain characteristics of human capital (average board tenure) and external social capital (directors’ interlocks) are positively related to the firm performance. The empirical findings also indicate that the internal social capital, measured by board density, is positively related to the firm performance and moderates these above relationships, increasing the potential of the resources contributed by the board members and influencing to a large extent on a firm’s performance. Practical implications The results of the investigation will help both executives and scholar in two ways. First, they will assist firms when they have to select board members, as they can now understand how the resources that board members bring with them can affect the firm performance. To be more effective, boards need to have members that have experience as firm’s directors, external connections to other boards and many internal ties among them. Second, in this context, internal social capital is especially relevant, so the firms should look for possible ways of encouraging internal ties between directors. In this paper, the authors have opted for study the participation of directors in committees. Originality/value The authors propose that these three types of capital (human, external and internal social capital) need to be synergistically combined to create a group of directors with access to a complete set of skills, knowledge and connections, but which can still work as a compact social group when making decisions.

Board Capital and Board Effectiveness: An Examination of Florida Community Foundations

2021 ◽  
Author(s):  
Lauren Azevedo
Keyword(s):  
Nonprofit Sector ◽  
Board Members ◽  
Executive Directors ◽  
Board Effectiveness ◽  
Structural Capital ◽  
Community Foundations ◽  
Board Capital ◽  
Management Literature ◽  
The Impact ◽  
Community Foundation

Community foundations have considerable potential for positive social change in the communities they serve yet are understudied in nonprofit management literature. This exploratory study considers board capital of community foundations and the impact this has on board effectiveness. Based on survey data from 71 community foundation board members and executive directors representing 13 community foundations, the study uses regression to test hypotheses. The study finds that board capital, measured by human capital, structural capital, and social capital, plays a factor in board effectiveness. Further, community foundation boards in the survey population are highly effective and have unique attributes that make them distinct from other types of boards. Findings have potential for significant insight on an important segment of nonprofit sector organizations.

The impact of board composition on firm performance in the restaurant industry

2017 ◽  
Vol 29 (8) ◽  
pp. 2121-2138 ◽  
Author(s):  
Sujin Song ◽  
Hubert B. Van Hoof ◽  
Sungbeen Park
Keyword(s):  
Firm Performance ◽  
Restaurant Industry ◽  
Operational Performance ◽  
Board Members ◽  
Board Composition ◽  
Stewardship Theory ◽  
Outside Directors ◽  
Content Type ◽  
Restaurant Firms ◽  
The Impact

Purpose This study aimed to investigate the impact of the board composition on financial performance in the restaurant industry from a stewardship theory perspective. Design/methodology/approach The composition of board was measured as the ratio of inside and outside directors. Firm performance was operationalized as return on assets (operational performance) and Tobin’s q (market-based performance). Panel regression analysis tested the research hypotheses. Findings Using data from 25 restaurant firms from 2007 to 2013, the study found an insignificant impact of board composition on operational performance. However, a higher proportion of inside board members increases market-based performance. A higher proportion of outside board members decreases market-based performance. Practical implications Supporting the basic tenets of stewardship theory, restaurant companies may consider changing the current practice of having a super-majority of outside directors and increase the inside board members. Because inside board member have greater experience with the organization and the industry, they have a better understanding of the status quo and are better able to respond to opportunities and threats in the environment. Originality/value Considering the scarcity of research on how the board composition affects firm performance in the hospitality context, the present study is a forerunner in its exploration of the impact of inside and outside directors on restaurant firms’ performance.

scholarly journals Do the Characteristics of Independent Directors and Supervisory Board Members Matter in China?

2016 ◽  
Vol 2 (3) ◽  
pp. 27 ◽  
Author(s):  
Hongmei Xu ◽  
Jiang Lin
Keyword(s):  
Decision Making ◽  
Firm Performance ◽  
Supervisory Board ◽  
Clear Relationship ◽  
Independent Directors ◽  
Board Members ◽  
Decision Making Process ◽  
Listed Firms ◽  
Empirical Results

This paper investigates and compares the characteristics of independent directors and supervisory board members in Chinese listed firms. The occupational backgrounds of independent directors and supervisory board members in listed firms are very different. Besides, different firms have different preferences in employing independent directors and supervisory board members according to their demands. Moreover, the empirical results show that characteristics of independent directors and supervisory board members have no clear relationship with firm performance. No matter their professional backgrounds or age, the independent directors and supervisory board members do not have the authority to affect the decision making process of management. Thus they cannot really contribute to firm performance.

scholarly journals Responsible corporate governance: Towards a stakeholder board of directors?

2009 ◽  
Vol 6 (4) ◽  
pp. 9-19 ◽  
Author(s):  
Silvia Ayuso-Siart ◽  
Antonio Argandoña
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Empirical Research ◽  
Good Governance ◽  
Board Members ◽  
Board Composition ◽  
Central Question ◽  
Theoretical Approaches ◽  
Board Capital

The central question posed in this paper will be how to organize board composition in order to ensure a responsible corporate governance both from a CSR and a good governance perspective. Adopting a stakeholder approach to corporate governance, we analyze the arguments given by different theoretical approaches for linking specific board composition with financial performance and CSR, and discuss the empirical research conducted. Despite the inconclusive findings of empirical research, it can be argued that diverse stakeholders on the board will promote CSR activities within the firm, but at the same time will increase board capital (which ultimately may lead to a better financial performance). Finally, we propose a model for selecting board members based both on ethical and pragmatic arguments

scholarly journals Faktor-Faktor Yang Mempengaruhi Kinerja Perusahaan

2019 ◽  
Vol 2 (5) ◽  
Author(s):  
Michael Hidayat
Keyword(s):  
Firm Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
Secondary Data ◽  
Financial Statement ◽  
Board Members ◽  
Board Independence ◽  
Managerial Ownership ◽  
Board Size ◽  
Size Firm

The Purpose Of This Research Is To Analyze Determinants Of Firm Performance In Non-Financial Companies Listed On Indonesia Stock Exchange. Determinants That Are Tested In This Research Include: Board Independence, Board Size, Firm Size, Firm Age, Liquidity, Leverage, Managerial Ownership, Female Board Members. The Object In This Research Is Non-Financial Companies Listed From 2011 Until 2014. The Population Of This Research Is 378 Non-Financial Companies. Sampling Techniques That Used In This Research Is Purposive Sampling. There Are 30 Non-Financial Companies Listed From 2011 To 2014 Which Met The Criterion Used As Sample. The Data Used Is Secondary Data That Collected From Financial Statement Of The Company. Analysis Method Of This Research Is Multiple Linier Regressions. The Result Of This Research Conclude That Board Independence, Leverage, And Female Board Members Have Influence Toward Firm Performance. Other Variable Such As Board Size, Managerial Ownership, Firm Size, Liquidity, And Age Firm Don’t Have Influence To Firm Performance. 

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