Appointment Of Board Members Research Articles

Gender Composition of Board of Directors and Financial Performance: A Case of Selected Companies in Nigeria

Like some other countries, the Nigeria Security Exchange Commission in 2011 declared that all listed companies should encourage diversity in the appointment of board members and that the criteria for selection of directors should reflect gender composition, thereby allowing more women on board of listed companies. Despite these declarations there still seems to be low representation of women in mostly top executive positions of companies in Nigeria. It is also unclear whether corporate board gender balance composition improves companies’ financial performance in Nigeria given this low representation of women on board. Hence, the need for this study to examine the relationship between board gender composition and companies’ financial performance in Nigeria, as well as examining the recent trend in board gender composition of selected companies. The study employed descriptive and correlation analyses for five companies listed on the Nigeria Stock Exchange between 2010 and 2020. The study found near zero positive relationship between companies’ financial performance (profit growth rate) and board gender composition (ratio of female representation on board to board size). It revealed that though the board of directors of the companies in Nigeria are still majorly male dominated, the number of female representation on boards has increased marginally during period understudy. The study concludes that gender composition of board member has very small or no significant relationship with company’ profit and performance in Nigeria.

Strategies for enhancing the functionality of hospital management boards in central hospitals: Evidence of a developing economy

Zimbabwe’s public hospitals have been in a declining mode for three consecutive decades marred by economic hardships rooted in the deteriorating governance structures and systems at a provincial and national level. The decline is purported to weaken the strategies that enhance the functionality of board management (Gilson & Agyepong, 2018). Efforts by the government to introduce effective strategies to revamp and enhance the functionality of public hospital boards have been in vain (Moyo, 2016; Sikipa, Osifo-Dawodu, Kokwaro, & Rice, 2019). The aim of the study is to explore strategies for enhancing the functionality of hospital management boards (HMBs) in central hospitals of Zimbabwe using a survey in order to improve performance, and service delivery overall. The study employed a qualitative research design gathering data by interviewing 12 respondents as the sample for the study selected from a target population of 66 hospital chief executive officers (CEOs) and board chairs. The 12 respondents were selected using the purposive sampling technique based on experience and knowledge as the inclusion and exclusion criteria of participants. The study revealed 6 critical strategies as gaps that hospitals need to enhance to improve on performance. These include networking, monitoring and evaluation, revenue generation, public-private partnerships (PPPs), HMB operational plan, and transparency in the selection and appointment of board members. The gaps identified required policy review to strengthen the appointment and performance of HMBs.

The role of financial reporting quality in selecting new audit committee member

AbstractIn this paper, we examine how the Boards of Directors affect their firm's financial reporting quality (FRQ) through the appointment of new Audit Committee Members (ACM) with a sample of firms from the period 2007 to 2011. Using the appointee firm's financial report quality as a proxy for new ACMs’ financial reporting attributes, we find that appointer firms are more likely to appoint new ACMs with financial reporting attributes similar to firms’ FRQ. We also show that firms appointing ACMs with relatively weak financial reporting attributes are more likely to have decreased subsequent FRQ. Further, we find that firms appointing ACMs with relatively weak financial reporting attributes suffer more deterioration on their subsequent FRQ when their financial reporting qualities are more different from the ACMs’ financial reporting attributes. For the appointment of board members not on the Audit Committee, we find no similarity of financial reporting quality between appointer firms and new directors.

A framework policy analysis of national health insurance policymaking in sub-Saharan Africa.

National health insurance (NHI) is a financing mechanism established by a national government with the goal of covering all or almost all of its citizens. A number of low- and middle-income countries have established NHIs as part of a strategy to progress towards universal health coverage. The establishment of an NHI presents a potentially significant shift in national health sector governance, but little is available in the literature regarding how policymaking authority and health governance is shared between NHIs and ministries of health (MOHs). To answer this question, we conducted a descriptive, qualitative comparative analysis of policies, including legislation, guidelines and webpages, from four sub-Saharan African countries that have established or are in the process of establishing an NHI scheme as of 2019 (Ghana, Kenya, Zambia and South Africa). We developed a novel conceptual framework comprising 16 NHI policy domains and conducted a deductive review of relevant policies. We then extracted and indexed policy elements according to this framework to facilitate comparative analysis. We found substantial variation across countries in the types of policies developed and the decision-making authority around those policies. MOHs in all four countries retained at least some decision-making power over the NHIs through regulations and appointment of board members. However, NHIs were often delegated policymaking authority in key areas including financing mechanisms, provider payments, member payments, benefit schemes, accreditation and relationships with private health insurance schemes. The results of this analysis illustrate many aspects of health regulatory power and oversight that will need to be defined as part of establishing NHIs. The approaches from these four countries and the conceptual framework presented in this manuscript may be helpful for other countries in evaluating differing approaches to shared health governance between NHIs and MOHs.

Board Diversity and Earnings Quality of Listed Deposit Money Banks in Nigeria

Instability due to frequent threats of financial distress has been a major problem facing deposit money banks (DMBs) in Nigeria. Efforts by the Nigerian government in the past to address this problem seem to have yielded little results as recent developments of instability in the banking industry indicate. In making such efforts, not much attention has been directed to the area of deceptive earnings reporting, and how board diversity can help checkmate such practices to enhance the quality of earnings reports which is essential in detecting in time financial distress warnings and identifying the necessary steps required to arrest the distress. In view of this, the study investigated the issue of board diversity as it affects the earnings quality of 13 out of 14 listed deposit money banks in Nigeria. The board diversity variables studied include board independence, block-shareholding, gender, age, expertise in accounting and finance, and board diversity combined index (representing the joint effect of the board diversity attributes on earnings quality). Earnings quality was measured from the accruals quality perspective using loan loss provision accruals quality. The study adopted fixed effect regression, employing two models to achieve the research objectives. It was found that Board Diversity Index had negative and significant effect on the discretionary loan loss provision of listed deposit money banks in Nigeria. Hence, the study concluded that the joint effect of the board diversity attributes improves the earnings quality of listed deposit money banks in Nigeria. The study recommended that the regulatory authority for the DMBs should ensure that appointment of board members aligns with corporate governance code demands on board diversity best practices, as this holds the potential of optimizing the joint effect of the board diversity attributes on earnings quality in a typical unitary board system setting as obtains in Nigeria.

The Greek paradigm of corporate governance and board of directors

Corporate governance encompasses a multidisciplinary approach, which includes the internal and external factors that affect the interests of a company’s stakeholders. The Greek corporate governance framework of listed companies has initially been established in accordance with EU regulation and soft law recommendations, in order to enhance board accountability and transparency, empower shareholders’ activism and promote financial disclosure. In that regard, it has recently been reformed by the provisions of Law 4706/2020, aiming mainly: to empower the strategic and supervisory role of the board of directors, by introducing a clear description of the obligations of non-executive and independent non-executive directors and by including the establishment of an “adequacy (internal fit-and-proper) policy” for the appointment of board members. Accordingly, two new compulsory committees are added, the nomination and the remuneration committee, which should entirely be composed by non-executive members and are invested with an advisory role in determining the remuneration policy and proposing board candidates. Furthermore, the adoption of a Corporate Governance Code is rendered substantial for all listed companies. These provisions illustrate specifically the reform of the internal corporate governance structures, which should be implemented having regard to the general principles of transparency and proportionality

Influence of the Board of Management Financial Practices on Students' Academic Performance in Public Secondary Schools in Nyamira County Kenya

The Board of Management plays an important role in school management which encompasses policy formulation and resource allocation. This study therefore sought to investigate the influence of the Board of Management financial practices on students' academic performance in public secondary schools in Nyamira County, Kenya. A convergent parallel mixed-method research design was used. The study targeted students, teachers, departmental heads and Board of Management Members making a total study population of 19,609. Both probability and non-probability sampling methods were used to select a sample size of 396 participants. Data was collected using questionnaires, interview guide observation tool and school examination performance analysis document. Statistical package for social sciences aided the quantitative analysis, while qualitative data used thematic analysis technique. Reliability testing was done using Cronbach’s Alpha. Descriptive and inferential statistics were used to present the analyzed data. Analysis of variance (ANOVA) was used to test significance between means. The study found out that there was a statistical significant association between board of management financial practices and student academic performance. The study also found out that Board of management did not utilize the school finances well and therefore students’ academic performance was affected. The study recommended that Board of Management, in collaboration with the government, should ensure appointment of board members with some basic financial management literacy. Keywords: Board of Management, Students' Academic Performance, Financial Management. DOI: 10.7176/JEP/11-23-02 Publication date: August 31 st 2020

"Do we need boards at all?": prospettive di intelligenza artificiale nei consigli d'amministrazione

Il presente lavoro si concentra sui potenziali sviluppi per la corporate governance, derivanti dall'integrazione di intelligenza artificiale nel consiglio di amministrazione.La trasformazione digitale sta influenzando l'organizzazione aziendale ed il suo framework culturale: il cambiamento potenziale sugli attuali quadri normativi è tale che anche la corporate governance ed il ruolo dei consigli d'amministrazione come li conosciamo oggi sono davanti ad una sfida di adattamento. In questo lavoro, sebbene si riconosca che grande parte del lavoro amministrativo (dove non sia necessario una dose di giudizio più"umano") potrebbe essere portato avanti da macchine intelligenti nel futuro prossimo, argomenteremo sulle nuove possibilità nell'interazione uomo-macchina, all'interno dei consigli di amministrazione, e lanceremo tre provocazioni di ricerca, riguardo: l'uso dell'intelligenza artificiale nellanominazione di consiglieri, l'integrazione di algoritmi nel consiglio, ed infine, prospettive di responsabilità.

Risk Assessment: A Fight against Fraud in Nigerian Organizations

With the resent reforms in corporate governance requirement, risk assessment has become a prominent feature in organizational control and management. This study looks at the risk assessment practices of some selected firms in Nigeria to determine the presence and therefore the impact of this practice. The population comprised of firms listed on the stock exchange that are audited by the big four audit firms (KPMG, E&Y, PWC & AWD) in Nigeria. Using judgment sampling, two senior management and four internal control staff were selected. Data was collected by means of a questionnaire with response options graduated into five Likert scales. The questionnaire captured responses from questions on risk assessment practices and fraud occurrence in the organizations. Logistic regression was used to test the hypothesis and the result showed a positive and significant relationship between risk assessment and fraud in Nigerian organizations. The study provides insight into the organizational practice with reference to risk assessment. From this study, Nigerian Organizations have not imbibed the prescriptions of the resent corporate governance codes. The study, therefore, recommends that sanctions should be put in place to enforce compliance to these corporate governance codes. and attention should be paid to the appointment of board members to ensure that a vibrant audit committee is constituted.

Pathological Corporate Governance Deficiencies in South Africa's State-Owned Companies: A Critical Reflection

Globally, states use state-owned companies (SOCs) or public corporations to provide public goods, limit private and foreign control of the domestic economy, generate public funds for the fiscus, increase service delivery and encourage economic development and industrialisation. Particularly given its unique socio-political and economic dynamics, a country such as South Africa clearly needs this type of strategic enterprise. Yet, that does not mean that everything at our SOCs is as it should be. The beleaguered South African Broadcasting Corporation (SABC) has recently seen the resignation of board members, shareholder interference in its operational affairs, and a high turnover of chief accounting officers and other executive management members. Due to non-performance, it has also received several cash injections from its shareholder to enable it to continue to deliver its services. In addition, the shareholder minister took it upon herself to amend the SABC's memorandum of incorporation, conferring upon herself the authority to appoint, suspend or even dismiss key executive members. South African Airways (SAA), in turn, has had seven CEOs in less than four years, has had to be bailed out at a cost of R550 million, and has in addition been granted a R5 billion guarantee by the shareholder for a restructuring exercise. Other SOCs such as Eskom, the Post Office and Telkom have also experienced high board and executive management turnover, perennial underperformance necessitating regular bailouts, and challenges regarding the division of power between their boards and the various shareholder ministers. Another issue that seems to plague South Africa's SOCs is the appointment of board members and executive officials with questionable qualifications. By critically examining the corporate governance challenges besetting the SABC, SAA and Eskom in particular, this article seeks to explore the root causes of the corporate governance deficiencies of SOCs, and how their corporate governance can be enhanced. It is concluded that the challenges faced by the country's SOCs are twofold: firstly, the SOCs boards' lack of appreciation of the cardinal corporate governance rules, and secondly, the role of government as a single or dominant shareholder, which results in substantial political interference in the running of the SOCs. This dual problem requires a dual solution. To arrest the problem of poor corporate governance in SOCs, government as the shareholder should firstly appoint fit and proper directors, having followed a sound due-diligence process. Once it has established such properly skilled and competent boards, however, government should adopt an arm's-length approach to the affairs of the SOCs as a way of insulating these corporations from political interference

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

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.

Board members' education and firm performance: evidence from a developing economy

PurposeThe purpose of the present paper is to examine the influence of the educational qualifications of board members, including the CEO, on the financial performance of Indonesian listed firms. Indonesia is a developing economy that adopts a two‐tier board system.Design/methodology/approachThis study employs a sample comprising 160 firms listed on the Indonesia Stock Exchange (IDX). Tobin's Q and return on assets (ROA) are used as measures of financial performance. It uses four proxies for board members' educational qualifications, namely postgraduate degrees, degrees obtained from prestigious universities, degrees obtained from developed countries, and degrees in financial disciplines. Regressions are performed separately for the supervisory board, management board, and CEO.FindingsThis study provides empirical evidence that the educational qualifications of board members and the CEO matter, to a particular extent, in explaining either ROA or Tobin's Q. For example, CEOs holding degrees from prestigious domestic universities perform significantly better than those without such qualifications.Practical implicationsEven though intellectual competence should appear to be one of the considerations in the appointment of board members, educational qualification is not always a good proxy for superior advising or managerial quality. There may be many other factors that need to be considered, such as experiences, managerial skills, networks, and other skills obtained outside schools. As such, the establishment of a nomination committee, which is expected to provide independent recommendations on qualified candidates to serve in the boardrooms, plays an important role.Originality/valueEmpirical studies focusing on the influence of the educational backgrounds of board members and the CEO on financial performance are still rare in the literature. This study is among the first to address such an issue in the context of a developing economy.

A Study of the Activities and Roles of Public Transit Boards

Abstract This study examines public transit boards of directors' role performance, prescribed activities that facilitate role performance, relationships between the roles and prescribed activities, and characteristics of boards and their members that affect members' involvement in board activities. It surveys public transit boards and analyzes the resulting data, using factor analysis, structural, and stepwise regression equations. The study finds that transit boards' role performance is enhanced by board members' involvement in contextual, analytical, strategic, interpersonal, and political activities, but not by involvement in board educational activities. Additionally, it finds positive relationships between many of the board member characteristics examined and most of the prescribed board activities. Exceptions to these positive relationships are also revealed. Negative relationships exist between the level of formal education of board members and such activities as setting aside time to learn about the organization and discussing future directions of the organization with other board members. Appointment of board members by state governments exerts a negative effect on board members' attentiveness to decision-making processes, and the use of long-range plan priorities in making strategic decisions. Service on other boards negatively affects members' involvement in transit board-related interpersonal activities.

A Study of the Activities and Roles of Public Transit Boards

Abstract This study examines public transit boards of directors' role performance, prescribed activities that facilitate role performance, relationships between the roles and prescribed activities, and characteristics of boards and their members that affect members' involvement in board activities. It surveys public transit boards and analyzes the resulting data, using factor analysis, structural, and stepwise regression equations. The study finds that transit boards' role performance is enhanced by board members' involvement in contextual, analytical, strategic, interpersonal, and political activities, but not by involvement in board educational activities. Additionally, it finds positive relationships between many of the board member characteristics examined and most of the prescribed board activities. Exceptions to these positive relationships are also revealed. Negative relationships exist between the level of formal education of board members and such activities as setting aside time to learn about the organization and discussing future directions of the organization with other board members. Appointment of board members by state governments exerts a negative effect on board members' attentiveness to decision-making processes, and the use of long-range plan priorities in making strategic decisions. Service on other boards negatively affects members' involvement in transit board-related interpersonal activities.

Investment and control in international joint ventures: the case of China

In this study, we explore several factors affecting the amount of control that foreign companies have over their joint ventures in China. Managers working in sixty-seven international joint ventures were asked to report the share of equity held by the Chinese and foreign partners; the extent to which each partner had contributed important non-capital resources; the ratio of IJV board members appointed by each partner; the nationality of managers holding key executive positions in the IJVs; and the amount of strategic and operational control that each partner enjoyed. Results showed that equity share is the major lever for the exercise of strategic control and also influences operational control through its effects on the appointment of board members and appointments to key executive positions. Results also showed that providing non-capital resources has a direct effect on operational control in addition to its indirect effect through appointments to key executive positions.