Board Monitoring And Firm Performance
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Board Monitoring And Firm Performance
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Author : Asmaa Aly Hanafy
language : en
Publisher:
Release Date : 2020
Board Monitoring And Firm Performance written by Asmaa Aly Hanafy and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Performance categories.
Abstract: There are several research papers regarding the relationship between corporate governance and firm performance. One of the aspects of corporate governance is the board of directors. Board monitoring is a critical aspect which can be measured by number of board meetings and number of board committees. There are several studies on board diversity and composition of board of directors and firm performance, while there are few research studies on the number of board committees and board meetings and their relationship with the firm performance. Accordingly, this thesis focuses on the relationship between board monitoring measured by number of board meetings and number of board committees and firm performance in the UK. The sample is Financial Times and London Stock Exchange (FTSE) 150 which includes the largest 150 listed companies on London Stock Exchange. Firm performance is measured by an accounting measure which is return on assets (ROA) and a market performance measure which is Tobin’s Q. The results of this study show that there is no significant relationship between number of board meetings and firm performance. However, there is a significant negative relationship between number of board committees and firm performance. Keywords: board committees, board meetings, corporate governance, firm performance, FTSE150, UK.
Corporate Governance And Organisational Performance
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Author : Naeem Tabassum
language : en
Publisher: Springer Nature
Release Date : 2020-06-28
Corporate Governance And Organisational Performance written by Naeem Tabassum and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-06-28 with Business & Economics categories.
Establishing a corporate governance strategy that promotes the efficient use of organisational resources is instrumental in the economic growth of a country, as well as the successful management of firms. This book reviews existing literature and identifies board structural features as key variables of an effective corporate governance system, establishing a multi-theoretical model that links Board structural characteristics with firm performance. It then, using a comprehensive empirical study of 265 companies listed on the Karachi Stock exchange, tests this conceptual model. This research serves as a significant milestone, reflecting the socio-economic setting of emerging economies, and highlighting the need for the corporate sector in emerging markets to move away from a 'tick-box' culture. It argues that the sector needs to implement corporate governance as a tool to mitigate business risks; appoint and empower non-executive directors to achieve an effective monitoring of management; and establish their own ethical and governance principles, applicable to the Board of Directors. Based on an extensive data base, collected painstakingly over five years, this book offers new insights and conceptual framework for further research in this area. Given the breadth and width of the research, it is a useful source of future reference for students, researchers and policy makers.
Board Meetings Committee Structure And Firm Performance
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Author : Ivan E. Brick
language : en
Publisher:
Release Date : 2010
Board Meetings Committee Structure And Firm Performance written by Ivan E. Brick and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
In this study, we study the relationship between the level of board monitoring activity and firm value for a broad panel of firms over a six-year period from 1999 to 2005. We develop and examine several proxies for the level and intensity of board monitoring based on board activity and committee structure. Our first proxy is the number of annual board meetings and our second proxy relates to the number of director-days devoted to monitoring. We use pooled and fixed effect structural models to examine the relationship between firm value and board monitoring as captured by these proxies. Other proxies we use are based on the committee structure reflecting the increased political and regulatory focus on the role of these committees. Specifically, we use the shift to a fully independent Audit and Compensation Committee and the initiation of a Nominating Committee to proxy for an increase in monitoring activity. We show that prior performance, firm characteristics, and governance characteristics, appear to be a important determinants of board monitoring activity as captured by our proxies. We also show that the efforts of a board are driven by corporate events, such as an acquisition or restatements of financial statements. Our results indicate that the increased oversight and monitoring by the board has led to some increase in firm value.
The Impact Of Board Diversity On Boards Monitoring Intensity And Firm Performance
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Author : Melsa Ararat
language : en
Publisher:
Release Date : 2015
The Impact Of Board Diversity On Boards Monitoring Intensity And Firm Performance written by Melsa Ararat and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
The main objective of this paper is to investigate the impact of board diversity on the financial performance of the ISE-100 index firms traded in the Istanbul Stock Exchange (ISE). We use gender and generation differences as observable attributes and directors' educational and nationality backgrounds as proxies of non-observable attributes of values, beliefs, skills and competencies. We combine these different diversity indicators with "independence" through a diversity index, to account for the critical mass of diverse opinions needed for critical inquiry. We use market-to-book ratio and Tobin's Q as our market based and return on equity as our accounting based measures of performance. Second, to understand the process by which board diversity affects firm performance, we focus on the relationship between board diversity and the board's monitoring intensity, on the one hand, and monitoring intensity and firm performance, on the other. We define a board's monitoring intensity as a composite mediating variable consisting of the number of board meetings, the number of board committees, auditing and financial reporting quality of the firm and its disclosure intensity. We find a positive relationship between board diversity and performance and board diversity and board monitoring intensity. Furthermore, not only does monitoring intensity impact performance, but it also decreases the explanatory power of most of our board diversity measures when it enters the model in the diversity-performance estimations. Overall, our results suggest that diverse boards are better monitors, mitigating agency conflict and enhancing firm performance. We expect that the findings would be of interest for researchers, investors, shareholders, boards, and regulators.
Board Shareholder And Auditor Monitoring
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Author : Mohammad Azim
language : en
Publisher: LAP Lambert Academic Publishing
Release Date : 2010-06
Board Shareholder And Auditor Monitoring written by Mohammad Azim and has been published by LAP Lambert Academic Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-06 with categories.
This study investigates the effects of corporate monitoring mechanisms on firm performance and their substitution and complementary effects under different conditions of agency conflict. Following the much-reported collapses of publiclylisted companies such as Enron, World Com, HIH and One. Tel, corporate monitoring is an issue that has emerged at the forefront of the debate on corporate responsibility. The separation of ownership and control in publicly owned firms has the potential to create conflict between the interests of managers and shareholders. Such conflict can be reduced by devising effective monitoring mechanisms. There has been considerable prior research on corporate monitoring and firm performance. However, most studies have used single monitoring mechanisms to determine the effect of monitoring on firm performance. Attention has not been given to the combined effect of monitoring mechanisms and the possibility of these mechanisms having a substitution or complementary effect. This has implications for endogeneity and multicollinearity issues that are common concerns in corporate governance research.
Corporate Governance Mechanisms And Firm Performance
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Author : Shveta Singh
language : en
Publisher: Springer Nature
Release Date : 2022-05-12
Corporate Governance Mechanisms And Firm Performance written by Shveta Singh and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-05-12 with Business & Economics categories.
This book begins by analysing the various corporate governance mechanisms explored in the extant literature and determining their effectiveness in enhancing the firm value using multivariate analysis. The findings are of global relevance as the corporate governance regulations of most countries focus on independent directors as the mainstay of good governance. The empirical evidence from the first objective of this study corroborates the claim that independent directors do not strengthen the firms’ governance quality. The book is one of the few works to have analysed the possible reasons behind the ineffectiveness of the independent directors. Also, in view of the famous concept of the bundle of governance mechanisms, it might be possible that the independent directors strengthen the firms’ governance quality indirectly by strengthening other governance mechanisms. This aspect too has little precedence. This study adopts a novel moderation and mediation approach to analyse the monitoring behaviour of independent directors in relation to other governance mechanisms. The work is a must read for corporate players as well as researchers and scholars studying this discipline.
Corporate Governance And Diversity In Boardrooms
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Author : Barbara Sveva Magnanelli
language : en
Publisher: Springer Nature
Release Date : 2020-10-02
Corporate Governance And Diversity In Boardrooms written by Barbara Sveva Magnanelli and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-10-02 with Business & Economics categories.
This book explores diversity in boardrooms to highlight the link between the heterogeneous dimensions of board diversity and their impact on the firms. The book provides a brief definition of corporate governance and focuses on the role and functions of the board of directors. The work contributes to the literature enriching the empirical findings about board diversity. After a deep review of the literature within several theoretical frameworks, such as agency, stakeholder, stewardship, resource dependence, and the institutional theory, the focus moves on the impact on financial performance. The board diversity effects are tested through an empirical analysis conducted on a sample of European listed companies, performing both a single and a joint diversity index analysis. Practitioners and academics will find this book particularly timely and useful as it combines both a review of the literature and robust empirical investigation. It will be an excellent reading for academics and practitioners interested in firm performance, corporate governance and stakeholder theory.
How Board Diversity Affects Firm Performance In Emerging Markets
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Author : Melsa Ararat
language : en
Publisher:
Release Date : 2015
How Board Diversity Affects Firm Performance In Emerging Markets written by Melsa Ararat and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
We investigate the indirect effect of a board's demographic diversity on firm performance via board monitoring in a context where boards are relatively homogeneous with respect to structural diversity, using data from Turkey. We contextualise our investigation by exploring the influence of ownership configurations on the effect of diversity. We find a positive and non-linear relationship between demographic diversity and performance, mediated by the board's monitoring efforts. The effect of monitoring is found to be contingent upon (moderated by) the control-ling shareholders' propensity to expropriate, measured by the deviation of control rights from cash flow rights, i.e. the wedge. We report that demographic diversity enhances firm performance by mitigating the negative effect of the wedge on board monitoring.Our results provide empirical support for the importance of contextual factors in the relationship between diversity and performance. Our framework and the compound diversity and board-monitoring indices we construct may prove useful to researchers.Practitioner/Policy Implications: Regulators can use our findings in formulating recommendations or regulations related to desirable characteristics of boards. Our results are also instructive for investors and proxy advisors and indicate that the mere existence of monitoring vehicles may be insufficient to prevent expropriation by dominant shareholders, but diverse boards may mitigate the propensity to expropriate. Board members and shareholders should also benefit from the findings in creating boards that are more diligent monitors.
Corporate Governance And Firm Performance
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Author : Mark Hirschey
language : en
Publisher: Emerald Group Publishing
Release Date : 2009-04-16
Corporate Governance And Firm Performance written by Mark Hirschey and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-04-16 with Business & Economics categories.
Focuses on corporate governance, broadly defined as the system of controls that helps corporations and other organizations effectively manage, administer, and direct economic resources. This book focuses on: the impact of deregulation and corporate structure on productive efficiency; and the effectiveness of the fraud triangle and SAS.
Optimal Board Monitoring In Family Owned Companies
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Author : En-Te (John) Chen
language : en
Publisher:
Release Date : 2010
Optimal Board Monitoring In Family Owned Companies written by En-Te (John) Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
We propose that high levels of monitoring are not always in the best interests of minority shareholders. In family-owned companies the optimal level of board monitoring required by minority shareholders is expected to be lower than other companies. This is because the relative benefits and costs of monitoring are different in family-owned companies. At moderate levels of board monitoring, we find concave relationships between board monitoring variables and firm performance for family-owned companies but not for other companies. The optimal level of board monitoring for our sample of Asian family-owned companies equates to board independence of 38%, separation of the Chairman and CEO positions and establishment of audit and remuneration committees. Additional testing shows that the optimal level of board monitoring is sensitive to the magnitude of the agency conflict between the family group and minority shareholders and the presence of substitute monitoring. The results confirm that more monitoring is not always associated with better performance. However, the board governance practices of family-owned companies are still well below the identified optimal levels.