Ownership, Board Structure, and the Informativeness of Earnings - Evidence from an Emerging Market

2006 ◽  
Author(s):  
Michael Firth ◽  
Peter M.Y. Fung ◽  
Oliver M. Rui
Keyword(s):  
Emerging Market ◽  
Board Structure

Board structure, board committees and corporate performance in Russia

2017 ◽  
Vol 43 (10) ◽  
pp. 1073-1092 ◽  
Author(s):  
Irina Berezinets ◽  
Yulia Ilina ◽  
Anna Cherkasskaya
Keyword(s):  
Corporate Performance ◽  
Emerging Market ◽  
Panel Data Analysis ◽  
Gender Diversity ◽  
Board Independence ◽  
Board Structure ◽  
Company Performance ◽  
Public Companies ◽  
Content Type ◽  
Board Committees

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.

What drives board committee structure? Evidence from an emerging market

2019 ◽  
Vol 35 (3) ◽  
pp. 373-397 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Ali Uyar ◽  
Cemil Kuzey ◽  
Merve Kilic
Keyword(s):  
Corporate Governance ◽  
Audit Quality ◽  
Emerging Market ◽  
Panel Data Analysis ◽  
Positive Association ◽  
Developed Countries ◽  
Board Structure ◽  
Ceo Duality ◽  
Content Type ◽  
Board Committees

Purpose Board committees enable boards to function effectively, as committees improve the quality of corporate governance by fulfilling specific, assigned tasks. This study aims to explore how board structure, CEO duality and audit quality are associated with board committee structure in the context of an emerging market, namely, Turkey. Design/methodology/approach The sample consisted of 122 firms listed on the Industrial Index of Borsa Istanbul for the years between 2012 and 2014, inclusive, and this yielded 366 firm-year observations. To test the hypotheses, the panel data analysis method was used, which enabled the elimination of certain problems, such as multicollinearity and estimation bias, as well as specification of the time-variant association between the predictor variables and the output variable. Findings Board size, board independence and firm size had a positive association with the number and size of board committees, whereas CEO duality had a negative association with the number and size of board committees. Moreover, the appointment of female members on audit and corporate governance committees was more frequent in firms that had a high proportion of women on their boards. Finally, audit quality was positively associated with the existence of risk committee, the overall diversity of board committees and the diversity of corporate governance committees. Research limitations/implications The study is not free from limitations. It covers the time span between 2012 and 2014; thus, readers should be cautious about generalizing these results longitudinally, as a different time periods could possibly yield different results. The second limitation concerns the fact that only industrial firms were sampled; thus, these findings may not be valid in other sectors. Practical implications The paper shifts the attention of researchers from overall board structure to board committee structure. The results of the study provide insights for policymakers, boards and shareholders. Policymakers can formulate boards and committees by considering these findings. Boards can benefit from the conclusions of this study in shaping their own structure and sub-committee structures. Current and potential shareholders may find the results of the study instructive in making investment decisions. Originality/value This study investigates the factors associated with the structure of overall and specific board committees. Additionally, while most prior research on board committees has sampled firms that are domiciled in developed countries, this study examines the subject in an emerging country context, namely Turkey. Moreover, this study adds to the literature by examining the association between audit quality and board committee structure, which has been largely neglected in prior literature.

scholarly journals The Effect of Board Structure on Egyptian Mutual Fund Performance: A Structural Equation Model Analysis

2020 ◽  
Vol 12 (3) ◽  
pp. 1
Author(s):  
Nancy Youssef ◽  
Peng Zhou
Keyword(s):  
Structural Equation Model ◽  
Mutual Fund ◽  
Structural Equation ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Fund Performance ◽  
Equation Model ◽  
Board Structure ◽  
Fund Industry ◽  
Mutual Fund Industry

Purpose – This paper empirically explores the causality between board structure and the fund performance in the mutual fund industry of an emerging market. Design – Using a panel of 82 Egyptian funds spanning 10 years before and after the global financial crisis, we develop a Structural Equation Model to deal with the endogeneity between measures of governance and performance in a systematic and identified way. Findings – Experimental results show a significant negative relationship between the equity ownership by the directors and the fund performance. Evidence shows little support for a significant effect of board structure on the performance after controlling for the endogeneity. It implies the misconduct of governance rules in Egypt, especially the weakness in board composition. Originality– Given the important role of mutual fund industry in Egypt, this is the first study of its kind explores the causality between board structure and the fund performance in the mutual fund.

scholarly journals Board Structure and Firm Performance:Evidence from Emerging Market

2020 ◽  
Vol 8 (5) ◽  
pp. 2305-2311
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Corporate Performance ◽  
Emerging Market ◽  
Small Sample ◽  
Independent Director ◽  
Board Structure ◽  
Board Size ◽  
Firm Financial Performance

This paper fulfils the purpose by studying the effect of corporate board structure i.e., board size and independent director on firm financial performance for selected focused and diversified Indian companies. This study analyses the corporate governance structure of 76 Indian companies (60 focused and 16 diversified companies) listed on the BSE-Sensex for ten years from the year 2007-2016 using panel data analysis. The empirical findings showed a positive relationship of board size with firm performance and significant negative association of independent director with the corporate performance of focused Indian firms, while in the diversified Indian firm, board size found to be positively related to financial performance and independent director found to be negatively related to corporate performance. The result has shown that board structure has seemed to be significant in listed focused firm with firm performance while board structure of diversified firm seems to be insignificant with firm performance, it might be because of small sample size and dynamics of an emerging economy in India which is different from the developed economies of the world. This study implied that in emerging or developing economy like India, lower independent director usually boost company value, and adequate board size will significantly impact on firm performance both in case of focused and diversified firms. This research paper contribute and fill existing gap in literature on corporate governance by examining and establishing relation between firm performance and board structure with focused and diversified Indian firms.

Corporate Governance Practices and Firm Performance in Emerging Markets: Empirical Insights from India and Gulf Countries

2021 ◽  
pp. 097226292110257
Author(s):  
Waleed M. Al-ahdal ◽  
Faozi A. Almaqtari ◽  
Mosab I. Tabash ◽  
Abdulwahid Abdullah Hashed ◽  
Ali T. Yahya
Keyword(s):  
Corporate Governance ◽  
Positive Impact ◽  
Emerging Market ◽  
Secondary Data ◽  
Listed Companies ◽  
Annual Reports ◽  
Board Structure ◽  
Gulf Countries ◽  
Governance Practices ◽  
The Impact

The purpose of this article is to analyse the impact of corporate governance practices on the performance of listed firms from countries like India and the Gulf countries. This research study relies on secondary data collected from annual reports of 100 companies covering 8 years, from 2010 to 2017, using manual content analysis. Fifty non-financial listed companies from each emerging market were selected; the selection is based on the market capitalization. Findings from countries’ dummy indicate that Indian companies perform better in corporate governance practices than Gulf countries. Moreover, corporate governance practices negatively impact Indian and Gulf countries’ firms’ performance measured by return on assets (ROA), except for governance effectiveness (GE) that has a positive impact. In contrast, corporate governance measured by board structure (BS) is negatively affected by the performance of Indian and Gulf countries’ listed companies measured by Tobin’s Q (TQ), whereas transparency and disclosure (TD), leverage (LEV) and GE have a positive impact. The results have implications for managers and policyholders to understand the corporate governance practices and their relationships with performance. Based on the best knowledge of the authors, this is one of the first studies that addresses the comparison between India and Gulf Cooperation Council (GCC) countries.

scholarly journals Board structure and disclosure of intellectual capital: An empirical study in an emerging market

2021 ◽  
Vol 10 (3) ◽  
pp. 140-149
Author(s):  
Anisa Kusumawardani ◽  
Wirasmi Wardhani ◽  
Siti Maria ◽  
Rizky Yudaruddin
Keyword(s):  
Intellectual Capital ◽  
Capital Market ◽  
Emerging Market ◽  
Ordinary Least Squares ◽  
Stock Exchanges ◽  
Board Members ◽  
Board Structure ◽  
Board Size ◽  
Previous Decade ◽  
The Board Of Directors

Capital market regulators have concentrated on company transparency, including and also intellectual capital disclosure (ICD) throughout the previous decade. Jensen and Meckling (1976) stated that high disclosure can reduce agency costs and the uncertainty faced by investors. This research aims to explore the ways the board structure, comprising board size, independence, female board members and CEO dichotomy, affects intellectual capital disclosure within Indonesia. A sample comprising 323 non-commercial companies in 7 industries listed publicly from 2008 to 2017 on Indonesia Stock Exchanges (IDX) was analyzed using ordinary least squares (OLS) regression. This study found a positive and significant impact of board size which implied that a higher total number of members of the board of directors results in a higher extent of ICD. The larger the number of outside board members, the better. This makes the board more independent and allows it to provide a higher level of corporate governance to shareholders. The findings revealed the level of ICD significantly and negatively affected CEO duality statistically. The complete findings indicated robust implications of board structure for ICD. This study may be utilized to facilitate higher intellectual capital awareness and foster ICD execution by IDX capital market administrators.

Does corporate governance affect dividend policy in India? Firm-level evidence from new indices

2019 ◽  
Vol 45 (9) ◽  
pp. 1219-1238
Author(s):  
Debasis Pahi ◽  
Inder Sekhar Yadav
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Dividend Policy ◽  
Emerging Market ◽  
Board Structure ◽  
Governance Mechanism ◽  
Tobit Regression ◽  
Control Variables ◽  
Content Type ◽  
Compensation Committee

Purpose The purpose of this paper is to investigate the nexus between corporate governance and dividend policy of listed Indian firms. Design/methodology/approach Using new corporate governance stipulations, five new indices were constructed, namely, overall board governance index, board structure index, audit committee index, compensation committee index and nomination committee index. Using the newly developed indices, disclosure index and different firm-specific control variables, different panel Logit and Tobit regression models were estimated for 482 non-financial and non-utility listed firms during 2006–2017. Also, before the econometric analysis, mean difference test was conducted to examine the differences in dividend behaviour and corporate governance practices during pre- and post-Companies Act, 2013 and between payers and non-payers. Findings The overall evidence suggests that the firms having stronger corporate governance tend to pay higher dividends suggesting that the firm’s propensity to pay dividends increases with the improvement in corporate governance standards. Among the corporate governance indices board structure, audit committee and disclosure norms show a significant and positive relationship, whereas compensation committee and nomination committee show a positive but insignificant relationship with dividend policy. Control variables mostly had the expected impact on the dividends of the firms. Practical implications This study suggests that the establishment of the strong and effective corporate governance system is desirable to mitigate the agency conflicts between managers and shareholders and limit managers’ opportunistic behaviour in dividend payout policy. Originality/value This study is one of the latest studies to use several newly constructed indices on corporate governance mechanism based on new stipulations which bring new evidence on their specific impact on the dividend policy for an emerging market economy like India.

Do compositions of board and audit committee improve financial disclosures?

2017 ◽  
Vol 25 (2) ◽  
pp. 251-269 ◽  
Author(s):  
Arunima Haldar ◽  
Mehul Raithatha
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Emerging Market ◽  
Financial Disclosure ◽  
Board Structure ◽  
Content Type ◽  
Governance Practices ◽  
Financial Disclosures ◽  
The Impact

Purpose This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of the role of financial disclosures in addressing the agency problem. Design/methodology/approach Financial disclosure score is computed by considering disclosures provided by the generally accepted accounting principles and is the dependent variable. The independent variable – corporate governance score – is an index comprising internal governance mechanisms. The authors empirically examine the impact of corporate governance practices on financial disclosure using multiple regression model for 200 large listed Indian firms. Findings The study suggests that quality of governance practices significantly improves financial disclosure practices of the firm. Particularly, the composition of the audit committee is effective in improving disclosures. Practical implications The finding has implications for policy makers and practitioners. It will help investors, lenders, and other stakeholders to assess firms’ financial disclosure quality. In addition, the findings, suggest the influence of governance practices on disclosure, might help in the formulation of appropriate policies about board structure and audit function. It is also a call to investors to emphasize on governance quality of the investing firms. Originality/value The study builds a case for an urgent intervention for improving the existing governance standards to advance the quality of financial disclosure in an emerging market context.

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