The Impact Of Board Diversity On Boards Monitoring Intensity And Firm Performance
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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.
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.
The Impact Of Management Board Diversity On Corporate Performance An Empirical Analysis For The German Two Tier System
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Author : Marc Eulerich
language : en
Publisher:
Release Date : 2017
The Impact Of Management Board Diversity On Corporate Performance An Empirical Analysis For The German Two Tier System written by Marc Eulerich and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
For the last two decades, board diversity is increasingly considered as a significant mechanism of good corporate governance. Thus, the question arises whether a heterogeneously or rather a homogenously composed board contributes to the efficiency of a company's management and monitoring. Especially national and international regulators and standard setters consider board diversity to be associated with an increasing firm performance. Therefore, the economic impact of board diversity aspects needs to be investigated empirically. This study examines the relationship between diversity within management boards and corporate performance for the German two-tier system by presenting a comprehensive literature analysis as well as an empirical analysis based on 149 publicly listed German organizations for the financial years 2009, 2010 and 2011. Hence, management board diversity is characterized by attributes, such as gender, age, nationality and functionality. An analysis comparable to the one at hand including multiple dimensions for German companies has not been performed, yet. We mostly find negative effects of various board diversity characteristics on corporate performance, especially regarding age and national diversity. This may be due to the fact that great internationality on boards can decrease communication between board members and large age differences may alleviate decision-making processes.
Impact Of Board Gender Diversity On Firm Value
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Author : Thi Thuy Anh Vo
language : en
Publisher:
Release Date : 2017
Impact Of Board Gender Diversity On Firm Value written by Thi Thuy Anh Vo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
This paper focuses on the impact of board gender diversity on firm performance. Using a sample of 880 listed firms in 10 developed countries covering a nine year period, we find that gender diversity has a negative effect on firm market performance. The result is consistent when different robustness checks are employed. A negative correlation can be explained by the fact that the presence of women on boards increases monitoring function. When the investors' rights are well protected by the legal system, this extra monitoring may be costly for firms. This finding suggests that a quota for the exact anticipation of female directors on boards should be carefully considered.
Effect Of Board Diversity On Firm Performance In Different Social Contexts
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Author : Nam The Nguyen
language : en
Publisher:
Release Date : 2016
Effect Of Board Diversity On Firm Performance In Different Social Contexts written by Nam The Nguyen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Boards of directors categories.
The business case for board diversity is contrasted in two different social contexts in this thesis. Specifically, the effect of differences in gender, ethnicity, and the age of the directors may have on firm financial performance is compared across a sample of Vietnamese and Australian listed companies. The research employs the most efficient panel data regression method using a selection procedure of fixed/random effects testing. Regression output indicates that the gender and ethnic diversity of the board more positively influences Tobin's Q in Vietnam than they do in Australia while age diversity does not. Additionally, ethnic diversity more positively influences return on assets in Vietnam than in Australia, whereas age diversity more positively affects return on assets in Australia than in Vietnam. The result also suggests that there is no difference in the impact of gender diversity on return on assets across the two nations. These findings will have important implications for global harmonisation, the convergence of corporate governance, in general, and, in particular, recommendations about board diversity.
The Effect Of Corporate Gender Diversity On Board And Firm Performance
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Author : Nura Isah
language : en
Publisher:
Release Date : 2018
The Effect Of Corporate Gender Diversity On Board And Firm Performance written by Nura Isah and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Effective and qualitative corporate governance is the distinctive feature of newly emerging economy. Corporate governance has received significant attention due to global financial crisis and recent corporate failures involving multinational corporations all over the world. As the global economic system is changing, the corporate governance mechanisms are becoming essential determinants of companies current and future performance. Gender diversity and corporate performance have a strong association which entirely relies on effective board management. Therefore, the basic assumption is that appropriate gender diversity within the board will improved board effectiveness which in turn affect the firm performance. The major objective of this study is to examines the effects of board gender diversity on board and the firm performance. The study describes an extant research on theoretical and empirical perspectives with emphasis on the impact of women directors on corporate boards and firm performance. The study used secondary source as a method of data collections. The findings from the studies provides different outcomes; while some authors believe board gender diversity improve the level of firm performance, Others empirical studies discovered no any relationship between board gender diversity and firm financial performance. However, others were neutral by reporting neither positive nor negative relationship between gender diversity and firm performance. Furthermore, with respect to theoretical perspective, the study discover that both the agency theory and resource dependency theory only suggest the link between board gender diversity and firm performance, yet the real nature of the link remain unclear.
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.
How To Make Boards Work
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Author : A. Kakabadse
language : en
Publisher: Springer
Release Date : 2013-12-02
How To Make Boards Work written by A. Kakabadse and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-12-02 with Business & Economics categories.
How to Make Boards Work offers a unique view of the thinking and doing of governance. The outside-in perspective offers a holistic framework highlighting how global cultural, social and political diversity impact boards of directors. The inside-out perspective emphasizes how governance and boards can effectively realize sustainable value creation.
Women In The Boardroom And Their Impact On Governance And Performance
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Author : Renee B. Adams
language : en
Publisher:
Release Date : 2018
Women In The Boardroom And Their Impact On Governance And Performance written by Renee B. Adams and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
We show that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees. These results suggest that gender-diverse boards allocate more effort to monitoring. Accordingly, we find that CEO turnover is more sensitive to stock performance and directors receive more equity-based compensation in firms with more gender-diverse boards. However, the average effect of gender diversity on firm performance is negative. This negative effect is driven by companies with fewer takeover defenses. Our results suggest that mandating gender quotas for directors can reduce firm value for well-governed firms.