scholarly journals Board leadership structure and firm risk-taking behaviour.

2008 ◽  
Vol 6 (2) ◽  
pp. 52-60
Author(s):  
Yi Wang ◽  
Trevor D. Wilmshurst
Keyword(s):  
Board Of Directors ◽  
Risk Taking ◽  
Firm Risk ◽  
Listed Firms ◽  
Board Leadership ◽  
The Board Of Directors ◽  
Leadership Structure ◽  
Potential Impact ◽  
Board Leadership Structure ◽  
Archival Study

In this paper the conceptual frameworks, which make different predictions about the effect of board leadership structure on firm risk-taking behaviour, are examined. From a sample of 243 Australian listed firms, it is found that leadership structure does not have any significant influence on firm risk; higher blockholder ownership or lower dividend payout is related to increased performance variance. This research suffers from some limitations; the archival study of the functional background of board chairman may not reveal the underlying relationship between the board of directors and firm risk-taking behavior. We only test the influence of leadership structure on performance variance; further research could investigate the potential impact of board composition on firm risk-taking propensity.

scholarly journals Firm complexity and corporate board size: testing the moderating effect of board leadership structure

2010 ◽  
Vol 7 (4) ◽  
pp. 114-126 ◽  
Author(s):  
Hayam Wahba ◽  
Khaled Kadry Elsayed
Keyword(s):  
Corporate Governance ◽  
Organizational Adaptation ◽  
Corporate Board ◽  
Board Size ◽  
Policy Makers ◽  
Listed Firms ◽  
Board Leadership ◽  
The Board Of Directors ◽  
Leadership Structure ◽  
Board Leadership Structure

Most prior studies have argued that the relationship between firm complexity and board size is a monotonic one: complex firm tend to have a large board size. Contrary to previous work, it is hypothesized in this study that this relationship is more likely to be moderated by board leadership structure. Using a sample of 92 Egyptian listed firms over the period from 2000 to 2004, we found that firm complexity exerted a positive and significant coefficient on board size when the firm adopts a leadership structure that separates the roles of CEO and chairman. However, the incremental effect of firm complexity on board size was negative and significant for firms that combine the roles of CEO and chairman (i.e., CEO duality). This study provides supportive evidence for the argument that firms are more likely to manipulate their boards’ characteristics to attain organizational adaptation at the minimum total cost. Thus, studying of one main characteristic of the board of directors without taking into account the expected effect of other characteristics may lead to inconclusive evidence. This study offers insights to practising managers and policy makers. If practising managers want to maximize the value of their firms, they need to broaden their insight to understand that board characteristics are multidimensional, contingent and dynamic in their nature and differ not only across firms and industry, but also across countries. Moreover, before developing and launching new and additional corporate governance reforms, policy makers need to realize that differences in corporate governance systems cannot be fully explained outside their institutional environments.

scholarly journals Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya

2018 ◽  
Vol 14 (1) ◽  
pp. 22-33 ◽  
Author(s):  
Jill Atkins ◽  
Mohamed Zakari ◽  
Ismail Elshahoubi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Listed Companies ◽  
Board Members ◽  
Corporate Boards ◽  
Listed Firms ◽  
Stakeholder Groups ◽  
The Board Of Directors ◽  
Executive Managers

This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.

scholarly journals Board leadership structure and earnings quality

2018 ◽  
Vol 3 (1) ◽  
pp. 82-111 ◽  
Author(s):  
Chinedu Francis Egbunike ◽  
Augustine N. Odum
Keyword(s):  
Earnings Quality ◽  
Main Concern ◽  
Board Structure ◽  
Executive Directors ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type ◽  
Board Leadership ◽  
Leadership Structure ◽  
Board Leadership Structure

Purpose One main concern and issue affecting earnings quality is the extent to which managers manipulate earnings to mislead stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers. This study builds on prior research and examines empirically the relationship between board leadership structure and earnings quality of manufacturing firms in Nigeria. The purpose of this paper is to specifically focus on four board structure characteristics: board size, composition, proportion of non-executive directors and CEO duality. Design/methodology/approach Data used for this investigation were collected from secondary sources, i.e. annual reports and accounts. The study used the Pooled OLS regression model to examine the effect of the board structure on earnings management for a sample of 45 non-financial listed Nigerian companies (conglomerates, consumer goods and industrial goods firms) for the years 2011 to 2016. Findings Based on the analysis, board size and board composition were positive and significant. However, proportion of non-executive directors was negative and significant; while, CEO duality was positive and statistically significant. It was consequently recommended that audit firms should review their audit business model and become more circumspect of their client, e.g. provide fraud assessment and checks for earnings quality. Boards should not just reflect size but rather the skills and expertise of individuals appointed to the board. Furtherance to this, the effectiveness of boards can be improved by committees and sub-committees allocation of duties. Originality/value Few studies have addressed this area in the country.

The Role of Board Leadership Structure in Firm Governance

2021 ◽  
Author(s):  
Danuse Bement ◽  
Ryan Krause
Keyword(s):  
Firm Performance ◽  
Independent Director ◽  
Negative Consequences ◽  
Ceo Duality ◽  
Board Chair ◽  
Board Committees ◽  
Board Leadership ◽  
Leadership Structure ◽  
Board Leadership Structure

Boards of directors are governing bodies that reside at the apex of the modern corporation. Boards monitor the behavior of firm management, provide managers access to knowledge, expertise, and external networks, and serve as advisors and sounding boards for the CEO. Board attributes such as board size and independence, director demographics, and firm ownership have all been studied as antecedents of effective board functioning and, ultimately, firm performance. Steady progress has been made toward understanding how boards influence firm outcomes, but several key questions about board leadership structure remain unresolved. Research on board leadership structure encompasses the study of board chairs, lead independent directors, and board committees. Board chair research indicates that when held by competent individuals, this key leadership position has the potential to contribute to efficient board functioning and firm performance. Researchers have found conflicting evidence regarding CEO duality, the practice of the CEO also serving as the board chair. The effect of this phenomenon—once ubiquitous among U.S. boards—ranges widely based on circumstances such as board independence, CEO power, and/or environmental conditions. Progressively, however, potential negative consequences of CEO duality proposed by agency theory appear to be counterbalanced by other governance mechanisms and regulatory changes. A popular mechanism for a compromise between the benefits of CEO duality and independent monitoring is to establish the role of a lead independent director. Although research on this role is in its early stage, results suggest that when implemented properly, the lead independent director can aid board monitoring without adding confusion to a unified chain of command. Board oversight committees, another key board leadership mechanism, improve directors’ access to information, enhance decision-making quality by allowing directors to focus on specialized topics outside of board meetings, and increase the speed of response to critical matters. Future research on the governance roles of boards, leadership configurations, and board committees is likely to explore theories beyond agency and resource dependence, as well as rely less on collecting archival data and more on finding creative ways to access rarely examined board interactions, such as board and committee meetings and executive sessions.

scholarly journals Corporate governance and firm risk

2018 ◽  
Vol 18 (1) ◽  
pp. 52-67 ◽  
Author(s):  
Sudha Mathew ◽  
Salma Ibrahim ◽  
Stuart Archbold
Keyword(s):  
Risk Measures ◽  
Governance Structure ◽  
Corporate Boards ◽  
Firm Risk ◽  
Content Type ◽  
Board Processes ◽  
Governance Index ◽  
Leadership Structure ◽  
Board Leadership Structure ◽  
The Relationship

Purpose This study aims to explore the relationship between board governance structure and firm risk. In particular, this study develops a “governance index” based on four aspects of the board: board composition, board leadership structure, board member characteristics and board processes, and it examines how the overall index relates to firm risk. Design/methodology/approach The study is conducted using a sample of 268 UK firms from the FTSE 350 index over the period from 2005 to 2010. An index is constructed to capture the overall governance structure of the firm. Regressions of the index on three risk measures are examined. Findings This study finds that the governance index that aggregates the four sets of board attributes is significantly and negatively related to firm risk. Robustness tests confirm this result. Research limitations/implications A large number of studies have explored the relationship between the attributes of corporate boards and firm performance with mixed results. A much smaller number of studies have looked at board attributes and firm risk, but these have either focused on financial sector firms alone or have included only a single or a limited number of attributes. This study, using a broad agency framework, seeks to extend the work on firm risk and board attributes by both expanding industry sectors examined and using a comprehensive set of board attributes. Originality value The findings have policy and practical implications for investors, regulators and chairmen of boards of governors to the extent that they inform these constituencies about the set of board attributes that are associated with firm risk. This study is the first to use a comprehensive measure of governance and relate it to firm risk.

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