The Role of Board Leadership Structure in Firm Governance

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.

Application of Corporate Governance Practices in Companies Listed in CSE Sri Lanka

Purpose: The purpose of the article is to find out the application of corporate governance practices in companies listed CSE in Sri Lanka. Methodology: The study aimed at the factors influence in the application of corporate governance practices and firm’s financial performance in Sri Lanka. In this study, there are two dependent variables namely return on equity and return on asset and four independent variables namely board leadership, board structure, board size and number of board committees. The study used 20 top companies (blue-chip companies) as sample for period of five (5) years 2014-2018. The data was analyzed using the SPSS statistical software package. The descriptive statistics, correlation analysis and regression analysis were used in this study. Findings: The results show that there is a positive relationship between corporate governance practices and firm performance, in the Sri Lankan context. And also it was found that there is a positive effect of board leadership board structure, board size and board committees on ROE and ROA the effect of board leadership, board size and board committees are significant with ROE & ROA. Only board structure has an insignificant effect on ROE and ROA.

A gender study analysis of board members, C-suite, and insiders in the insurance industry

This paper will take a fresh look at the global insurance industry and see if women have made any significant gains in board leadership, C-suite, and insider positions in insurance. Our results show a clear trend of improvement in gender representation on board of director and insider positions for firms in the insurance industry. However, the gains stop there and unfortunately no significant advancement for the percentage of women in the C-suite positions is evident in our dataset at this time

The Senior Independent Director’s Evolving Role Across the Top 100 Malaysian PLCs: MCCG 2012 vs MCCG 2017

Purpose - This research aims to investigate the impact of the two main problems of Senior Independent Director’s evolving role, which includes the aspects under board leadership and board effectiveness proposed under the Malaysian Corporate Governance Code (Code) in contrast between 2012 and 2017 towards firm financial performance.Design/ methodology approach - For this analysis, a target list of the top 100 PLCs based on market capitalization was gathered from 784 Malaysian PLCs as of 14 August 2020. In the annual review of corporate reports, this research involves mean and standard deviation, analysis of the correlation and analysis of the materials published within the annual reports.Originality - This report is a comprehensive examination of the recent developments in Corporate Governance research in comparison between the Code in 2012 and 2017, which is also applicable to other PLCs other than the top 100 Malaysian PLCs scoring indices designed for the Senior Independent Director – Board Effectiveness and Board Leadership.