CEO Dismissals and Financial Restatements: The Role of Ethical Governance and Board Dynamics

This paper argues that the structure of corporate ownership varies systematically in ways that are consistent with value maximization. Among the variables that are empirically significant in explaining the variation in ownership structure for 511 U.S. corporations are firm size, instability of profit rate, whether or not the firm is a regulated utility or financial institution, and whether or not the firm is in the mass media or sports industry. Doubt is cast on the Berle-Means thesis, as no significant relationship is found between ownership concentration and accounting profit rates for this set of firms.

PurposeThe purpose of this paper is to study how board attributes impact corporate social responsibility (CSR). In particular, this paper aims to empirically examine the impact of financial performance on the relationship between board attributes and CSR. Board attributes such as board size, board independence, female board representation and CEO-chair duality are included.Design/methodology/approachThis study uses panel data set of 200 French companies listed during 2007–2018 period. The direct and moderating effects were tested by using multiple regression technique.FindingsThe results indicate that significant direct relationships exist among board attributes and CSR. Board independence and female board representation are positively linked with CSR. However, board size and CEO duality are negatively associated with CSR. Findings show, also, that corporate financial performance accentuates significantly the effect of board size, board independence and CEO-duality on CSR, but does not moderate the relationship between female board representation and CSR.Practical implicationsThe findings may be of interest to different stakeholders and policy-makers and regulatory bodies interested in enhancing CG initiatives to strengthen corporate social responsibility because it suggests thinking about implementing a broadly accepted framework of good CG practices to meet the demand for greater transparency and accountability. As an extension to this research, further study can examine the impact of ownership structure and audit quality on CSR issues.Originality/valueThis study extends the dynamic relationship between CG mechanisms and CSR by offering new evidence on how corporate financial moderates this relationship.

Research summary: Investing a firm's resources in corporate social responsibility ( CSR ) initiatives remains a contentious issue. While research suggests firm financial performance is the primary driver of CEO dismissal, we propose that CSR will provide important additional context when interpreting a firm's financial performance. Consistent with this prediction, our results suggest that past CSR decisions amplify the negative relationship between financial performance and CEO dismissal. Specifically, we find that greater prior investments in CSR appear to expose CEO s of firms with poor financial performance to a greater risk of dismissal. In contrast, greater past investments in CSR appear to help shield CEO s of firms with good financial performance from dismissal. These findings provide novel insight into how CEO s' career outcomes may be affected by earlier CSR decisions . Managerial summary: In this study, we examined a potential personal consequence for CEO s related to corporate social responsibility ( CSR ). We explored the role prior investments in CSR play when a board evaluates the firm's financial performance and considers whether or not to fire the CEO . Our results suggest that while financial performance sets the overall tone of a CEO 's evaluation, CSR amplifies that baseline evaluation. Specifically, our results suggest that greater past investments in CSR appear to (a) greatly increase the likelihood of CEO dismissal when financial performance is poor, and (b) somewhat reduce the likelihood of CEO dismissal when financial performance is good. Thus, striving to deliver profits in a socially responsible manner may have both positive and negative personal consequences . Copyright © 2017 John Wiley & Sons, Ltd.

Research Question/IssueThis study examines the influence of female board representation on CEO turnover and firm value. We focus on Russia, a patriarchal country with vast gender differences, where empathy, patience, and supportiveness are considered fundamental qualities of females.Research Findings/InsightsUsing a sample of public firms listed on the Moscow Exchange from 2006 to 2015, we find that female representation on boards is associated with lower CEO turnover–performance sensitivity. Further, female boards appear to add firm value, as we find that CEO retention decisions are associated with improved future firm value when the decision is made by a female board. Furthermore, we identify that female representation on boards is associated with greater diligence (i.e., hold more board meetings) after retaining their underperforming CEOs.Theoretical/Academic ImplicationsOur findings suggest that female boards tend to develop a long‐term view of CEO performance and that such boards exercise greater diligence and supportiveness, thereby adding shareholder value. Our results also indicate that patience and collaboration of corporate boards afford opportunities to develop strategic thinking, which is particularly valuable for a firm in times of crisis. Our study contributes to the research on what qualities of a board affect its decision making and effectiveness. Our research also adds to the literature on female board representation. We study Russia, where gender differences are prominent, and female representation occurs by happenstance rather than regulatorily / intentionally. Overall, we are able to attribute our findings to female representation on boards.Practitioner/Policy ImplicationsOur study contributes to the burgeoning research on corporate governance in Russia. Although the Russian economy has demonstrated unprecedented growth among emerging markets, research on corporate governance in Russia remains scarce. Our study is among the first efforts to understand how female boards perform in a patriarchal country. Our investigation, therefore, offers important insights for policymakers and practitioners.

We investigate whether female board representation and firms’ financial performance are related and whether the relationship differs for firms located in more prejudicial environments. As a proxy for prejudicial environment, we use two geographical indicators: (1) whether a firm is headquartered in a conservative “red” state (which tends to vote for Republican candidates) or in a liberal “blue” state (which tends to vote for Democratic candidates) and (2) whether the firm is located in regions where residents possess more stereotypical attitudes about gender equality. We find that both financial performance and female board representation are lower for firms headquartered in red states when compared to those in blue states, and we find similar results for firms located in regions where residents hold more gender-stereotypical views. However, financial performance improves when female directors are present regardless of the firm’s location. Evidence also shows that the incremental improvement in performance measured by Tobin’s q is greater in red-state than in blue-state companies and in regions where residents hold more gender-stereotypical views. The overall results imply that gender stereotyping holds back financial performance and that female directors help improve financial performance.

Scapegoating in Baseball

We investigate whether female board representation and firms’ financial performance are related and whether the relationship differs for firms located in more prejudicial environments. As a proxy for prejudicial environment, we use two geographical indicators: (1) whether a firm is headquartered in a conservative “red” state (which tends to vote for Republican candidates) or in a liberal “blue” state (which tends to vote for Democratic candidates) and (2) whether the firm is located in regions where residents possess morestereotypical attitudes about gender equality. We find that both financial performance and female board representation are lower for firms headquartered in red states when compared to those in blue states, and we find similar results for firms located in regions where residents hold more gender-stereotypical views. However, financial performance improves when female directors are present regardless of the firm’s location. Evidence also shows that the incremental improvement in performance measured by Tobin’s q is greater in red-state than in blue-state companies and in regions where residents hold more gender-stereotypical views. The overall results imply that gender stereotyping holds back financial performance and that female directors help improve financial performance.KeywordsFirm performanceFemale directorshipGender stereotyping

Research Purposes. The purpose of this research is to examine and analyze the influence of corporate governance, ownership structure, financial performance, audit quality, related party transaction, and founders on board towards financial restatement of Indonesia manufacturing companies.Research Methods. The design of this research is a quantitative research. The objects of this research are Indonesia Stock Exchange manufacturing companies of 2013-2017. Data analysis technique used in this research is logistic.Research Results and Findings. The result of this research shows that corporate governance represented by board of commissioner positively affect financial restatement, board of director negatively affect financial restatement, while independent commissioner and audit committee have no effect towards financial restatement. Ownership structure has no effect towards financial restatement. Financial performance, audit quality, and related party transaction also have no effect towards financial restatement. While, founders on board positively affect financial restatement.

Little research has been done on female board representation in emerging market multinational enterprises (EMNEs). Our paper considers the role of female board representation and its impact on open innovation (OI) in the unique context of emerging markets. We draw on upper echelons and institutional theories to understand how female board representation and cross-country institutional contexts influence coupled OI. Combining a 10-year (2009–2019) dataset with a rich in-depth content analysis of 183 (EMNEs) engaged in OI, our results reveal a significant positive association between female board representation and a firm's commitment to coupled OI initiatives. We also find that country-level institutional factors affect and positively moderate the relationship between female board representation and coupled OI. In emerging market environments where managerial perception and cultural beliefs sometimes hinder the promotion of females into top positions, our work has implications for EMNEs regarding how they harness diversity. We contribute to the OI literature by showing that female board representation enhances corporate OI investment within EMNEs.

The aim of this study is to identify the determinants of CEO dismissal in Belgian family SMEs. Based on a survey launched to 2.000 SMEs, 102 CEO dismissals were identified as well as other relevant features related to the family character of the firm. Logistic regressions have been used to explain CEO dismissal by several variables related to governance. The results indicate a significant influence of CEO attributes such as age and tenure on CEO dismissal. Also, firm age has been shown to enhance CEO dismissal. The other governance variables do not lead to significant findings. Taken together, these results suggest that specific risks of managerial entrenchment can explain CEO turnover in the context of family SMEs.

Objective- This study empirically examines the incidence of CEO dismissal in Malaysian Public Listed Companies (PLCs). Methodology/Technique Logistic regression is used in this study to estimate the relationship between firm performance, corporate governance and CEO. Findings The result shows the impact of evaluation SPMS to solve the market place error and also ability of executives' level of management to solve the behaviours issue in business organization. Novelty - This paper study on the type of CEO turnover which segregate the type of turnover into forced and voluntary turnover. This research idea has limited finding globally as previous research on CEO turnover do not separate between forced and voluntary turnover Type of Paper Empirical paper Keywords: , CEO dismissal; corporate performance; board attributes; ownership structure

Despite increasing stakeholder pressures, the number of female executives within the corporate upper echelons remains low relative to the number of female directors. We address this so-called “gender diversity gap” by examining the role that gender-diversity-valuing institutional investors (GDVIIs), who are amongst the most prominent stakeholders advocating for gender diversity today, play in channeling managerial attention toward increasing female executive representation. Drawing on stakeholder and performance feedback theories, we propose that top managers may maintain the support and cooperation of GDVIIs by increasing female executive representation at their firms but that such efforts are subject to managers’ limited attention as they attempt to balance GDVIIs’ dual priorities of gender diversity and financial performance. We find that GDVII ownership is positively associated with increases in female executive representation but that financial performance and female board representation both at peer firms and historically within the focal firm weaken this relationship, thereby shedding light on the relative lack of progress toward gender diversity in the executive ranks.

ABSTRACTEnvironmental, social, and governance (ESG) is attracting increasing attention from governments and various stakeholders. However, since incorporating a large number of environmental and social governance measures into corporate business strategies will affect a company's short‐term financial performance, it is difficult for ESG strategies to gain the decision‐making support of the board of directors. Female board representation, on the other hand, can address the above‐mentioned challenges by virtue of their acumen in environmental subsidies and their pro‐environmental market image. Nevertheless, the existing literature has not recognized the advantages of female board representation in these two aspects. Based on this, drawing on the Upper Echelons Theory and Gender Socialization Theory, this paper takes the listed companies on China's stock markets from 2014 to 2022 as a sample and uses a fixed effects model to analyze the impact of female board representation (FBR) on ESG. The research findings show that when there are two or three female board members, it significantly improves ESG performance. Secondly, from the perspective of the institutional environment, environmental subsidies amplify the positive impact of FBR on ESG. However, market competition has the opposite effect and may even offset the positive impact of environmental subsidies. The heterogeneity analysis further reveals that FBR has a greater positive impact on the ESG performance of companies in non‐critical industries and those that have established environmental committees.

In Kenya, university pension funds have underperformed due to irregular investment returns, non-remittance of contributions, and fund insolvencies. The purpose of this study was to examine the mediating role of portfolio diversification on the relationship between pension fund board characteristics and financial performance in Kenyan universities’ pension funds. The study focused on board size, gender diversity, and financial expertise and their impact on financial performance through the mediator of portfolio diversification. Using an explanatory design, the study analyzed secondary data from 26 universities’ pension funds covering the period 2015–2022 with 208 observations. The theories underpinning the research were Modern Portfolio Theory, Agency Theory and the Resource Dependence Theory. Results showed that board size has a positive influence on financial Performance (β = 0.1306, p < 0.05) but a negative effect on portfolio diversification (β = -0.2879, p < 0.05). Gender diversity enhances financial performance (β = 0.0122, ρ<0.05) but negatively impacts diversification (β = -0.0259, ρ<0.05), Financial expertise improves both ROA (β = 0.1124, ρ<0.05) and diversification (β = 0.0981, ρ<0.05. Sobel test results showed that portfolio diversification does not mediate board size and financial performance (Z = -0.636) but mediates gender diversity and financial expertise with financial performance (Z = 3.213 and 2.880, exceeding ±1.96). Policymakers should promote diverse boards with financial expertise to enhance decision-making. Regulators should mandate financial expertise and gender thresholds to improve investment strategies and diversification.

Preface to the Fourth Issue of Indian-Pacific Journal of Accounting and Finance