Board Leadership Structure Research Articles

Unveil the benefit of independent leadership structure on employee welfare

PurposeEmployees play a vital role in the success of a corporation. While boards of directors are created to protect shareholders’ interests, it is unclear if these directors also ensure employee welfare. In this vein, our paper examines the relationship between board leadership structure and employee well-being.Design/methodology/approachThe authors employ several analysis techniques, including univariate analysis, ordinary least squares (OLS) regressions, two-stage least squares (2SLS) regressions, propensity score matching methodology, the Heckman Selection model and difference-in-differences analysis. The sample comprises USA public firms for the period 1998–2018.FindingsOur findings indicate that having an independent chairperson can significantly benefit the welfare of employees, especially for firms with overly powerful chief executive officers (CEOs) and during times of financial distress.Originality/valueIndependent leadership structure is one of the crucial board characteristics that have not been examined to explain employee welfare at firms. We find that an independent chairperson can mitigate the negative effect of overly powerful CEOs on employee benefits. Importantly, independent chairpersons are beneficial for employees in difficult times and when CEOs are busy with daily activities.

The role of board leadership in deliberating international entry

AbstractThe current study addresses the formal and informal board leadership roles in new high-tech firms. Overall, we find that board leadership affects international engagements in idiosyncratic ways. Initially, we conjectured that the board leadership role structure would influence time to new markets, but the leadership role structure fails to do so, which indicates that neither a divided board leadership structure nor a dual board leadership structure matters. Instead, we find that the facilitating role of board chair leadership does. Although board chair leadership efficacy has a deliberating effect, we find it to have an interactive effect with a more resourceful board, indicating that efficacious leadership is more important than we typically would expect. Noteworthy, these dynamic interactions not only contribute to advancing new high-tech firms, but also contribute to shaping a resilient high-tech entrepreneurial ecosystem from within.

Board leadership and firm capital structure decision in Nigeria: an examination of CEO and chairperson's characteristics

Board leadership and firm capital structure decision in Nigeria: an examination of CEO and chairperson's characteristics

Board leadership and firm capital structure decision in Nigeria: an examination of CEO and chairperson's characteristics

Board leadership and firm capital structure decision in Nigeria: an examination of CEO and chairperson's characteristics

Board leadership structure and human capital disclosure: Role of independent directors

This study investigates board characteristics, including board leadership structure, which explain the human capital disclosure (HCD) provided by companies. It uses a self-constructed disclosure index to quantify the level of human capital information using content analysis. Generalized method of moment is employed to estimate a dynamic model of the relationship between HCD and the characteristics of boards of directors. The results show that companies are adapting to the new European Union (EU) Regulation Directive 2014/95/EU by increasing their HCD. There has been a change in the topics disclosed by companies that signal a commitment to social responsibility toward their employees and stakeholders. The level of HCD is significantly associated with board leadership structure, and independent directors play a moderating role when a chief executive officer (CEO) duality exists. Additionally, factors such as gender diversity, board size, board activity, company size and age, and the EU Directive approved in 2014 are all associated with HCD. This study enriches the debate on the role of independent directors in HCD because they can exercise a moderating role when CEO duality is present.

Board Leadership Structure and Firm Performance: Moderating Effects of Board Independence

Our study examines the impact of dual leadership on the company’s performance. We also investigate the moderating effects of board independence on duality and firm-performance relationship. The article uses a panel data framework, and the estimation has been carried out using system-generalized methods of moments. The results of our study postulate that dual leadership negatively influences firm performance; however, when the moderator, board independence, is introduced in the empirical model, it affects firm performance positively. We submit that the extensive and complete abolition of CEO duality by Indian regulators may require caution for Indian markets. JEL Codes: G34, L25, C33

Corporate Board Leadership Structure and Financial Performance: The Stewardship And Agency Theoretical Perspectives Of Private Limited Firms In Uganda

Purpose: This study aimed to establish the association between the board leadership structure and the financial performance of private limited companies in Uganda.
 Methodology: The study adopted a positivist paradigm and a cross-sectional design. 394 private companies were sampled from Central and Western Uganda. Quantitative data were collected from board members, accountants, auditors, and CEOs using a self-administered structured questionnaire. Pearson correlation and standard regression analyses were conducted for data analysis.
 Findings: The study established a positive relationship between a separate leadership structure and the financial performance of private companies. Separate leadership was confirmed as a recipe for private companies' financial success, accounting for 7% of the variance. The study also revealed that CEO duality was common amongst most private limited companies in Uganda.
 Unique Contribution to Practice and Policy: The study calls for a re-examination of the current policy on governance to make the corporate governance code obligatory to all firms and not just the listed entities. Regulators ought to reinforce their monitoring approach to effect adherence to the governance code.

Does corporate governance affect environmental reporting?

PurposeThis study examines, in relation to agency theory, the influence of corporate mechanism on the environmental reporting of banking businesses registered on the Dhaka Stock Exchange (DSE).Design/methodology/approachThis study was carried out consuming an example of 150 annual reports from 30 banks for the period 2015–2019. Ordinary least squares (OLS) regression was used to investigate the inspiration of corporate governance on the range of inclusive environmental reporting.FindingsThe outcomes reveal that insider equity, board leadership structure, and presence of female directors are statistically significant, while board size and outside directors are insignificant. Furthermore, the results also indicate that the adoption of environmental disclosure among banking businesses in Bangladesh is extra motivated by an increase in the inside skills and moderately the outside acceptability weights. Additionally, there appears to be a supposed lack of stakeholder pressure for environmental disclosure.Originality/valueThe results show that the range of environmental reporting of banking businesses in Bangladesh is good, at an average of 53.90%. It concludes that corporate governance has a substantial inspiration on the range of environmental reporting of banking businesses in Bangladesh.

The Influence of Board Leadership Structure on The Creditability of Financial Reporting in the Egyptian Context: Triangulation Approach.

The Influence of Board Leadership Structure on The Creditability of Financial Reporting in the Egyptian Context: Triangulation Approach.

Board Leadership Structure and Earning Quality: A Study from the Malaysian Banking Sector

Board Leadership Structure and Earning Quality: A Study from the Malaysian Banking Sector

Corporate wrongdoing and board leadership structure: An analysis of the WestJet spying scandal

AbstractThis study focuses on corporate espionage undertaken by WestJet Airlines, Canada's second largest air carrier. Employing a case study, we examine how board leadership‐endorsed internet snooping affected WestJet's board structure and performance. We also paired the case study with an event study methodology to enhance the case narrative and illustrate market responses to continuing revelations of WestJet's espionage over time. We find that investors initially discounted WestJet's value then over time reacted more to market changes and positive scandal‐related outcomes. WestJet withstood the adverse effects of wrongdoing and regained investor confidence and profitability via substantive and symbolic changes to their board leadership structure. The study's theoretical and practical implications are also given.

CEO duality and firm performance: A systematic review and research agenda

AbstractThis paper systematically reviews 314 empirical studies that examine the relationship between board leadership structure and firm performance. The results show that the mixed research findings are due to different firm performance measurements, research designs, sampling practices and approaches of dealing with endogeneity issues. Studies utilizing multiple‐country data, multinational companies, small firms or regions covering Africa, the Middle East, Eastern Europe and South America are under‐represented. It critiques the methodological weaknesses of some empirical studies and proposes that future researchers should use multiple firm performance measurements, a longitudinal research design and an integrative framework to better control the direct and moderating factors. Future researchers may advance the robustness of research by using multiple theoretical lenses to consider how various governance factors moderate the relationship between board leadership structure and firm performance, particularly the different ownership structures, managerial discretion contexts and national institutional factors.

Corporate governance and voluntary disclosures in annual reports: a post-International Financial Reporting Standard adoption evidence from an emerging capital market

PurposeThe purpose of this paper is to provide an empirical evidence concerning the influence of Corporate governance and voluntary disclosures in annual reports: a post-International Financial Reporting Standards adoption evidence from an emerging capital market.Design/methodology/approachData were collected from the annual reports of all 22 listed non-financial firms over a five-year period. Using content analysis, the audited annual reports of the firms were scored on the extent of overall and four specific types of voluntary disclosures made. The panel data obtained were analyzed using a generalized ordinary least squares regression model.FindingsThe findings of the study show that voluntary disclosures among the firms are low even after the adoption of IFRS. Corporate governance attributes of board size and board leadership structure are significant determinants of the extent of voluntary disclosures made by the firms. However, board independence and auditor type exhibit only a significant positive effect on voluntary financial and forward-looking information disclosures.Research limitations/implicationsFirms’ voluntary information disclosure and governance variables were restricted to those in annual reports, which may partially reflect the reality of firms’ disclosure and governance practices.Practical implicationsThe present study offers useful insights to regulators of the capital market to strengthen monitoring of firms to ensure strict adherence to corporate governance best practice guidelines as a means of improving information environment.Originality/valueThis study is one of the very few ones in Africa, especially in the context of Ghana Stock Exchange, to use post-IFRS data and examine a disaggregated voluntary disclosure by firms.

The influence of board characteristics on environmental performance: evidence from East Asian manufacturing industries

PurposeThe purpose of this study is to examine the influence of board characteristics on environmental performance in manufacturing firms of the emerging East Asian markets. The authors adopt a triple perspective of environmental performance that focusses on three major environmental areas including resource reduction, emission reduction and product innovation.Design/methodology/approachThe authors consider three main board characteristics, namely, board size, board independence and board leadership structure, and investigate their impacts on a multidimensional construct of environmental performance. Specifically, both linear and quadratic functions are applied to address a possibility of the non-linear relationship between board size and environmental performance. The authors use fixed-effects estimations on a sample of manufacturing firms in the emerging East Asian countries between 2011 and 2016.FindingsThe study explores an inverse U-shaped relationship between board size and environmental performance. The authors also reveal that manufacturing firms are more likely to have better environmental performance when the proportion of independent directors on board increases. However, the separation of CEO and board chair roles has no impact on environmental performance.Practical implicationsThe findings have important implications by identifying the role of a board of directors in implementing environmental protection strategies and by providing a foundation for corporate efforts to enhance sustainable development.Originality/valueThe study provides complete understanding of environmental performance as a multidimensional construct and sheds light on the influence of board characteristics, especially the inverse U-shaped influence of board size, on environmental performance in the East Asian manufacturing industries.

The effect of corporate governance on bank performance: evidence from Turkish and some MENA countries banks

This paper examines the relationship between the structure of corporate governance and performance in the banking sector. A sample has been selected using the generalized method of moment (GMM) approach. The sample consists of data from a total of 33 Turkish, Tunisia, Morocco and Lebanon banks which are listed in stock during the period between 2012 and 2017. Since this paper emphasizes corporate governance, a “Board Characteristics Index” was developed based upon four different aspects of the board composition–board leadership structure, board member characteristics and board committee structure. It also demonstrates how the overall index relates to banking performance. The results show that the governance index, which aggregates with the four sets of board attributes relate significantly and positively with return on assets.

The Effect of Strengthened Corporate Governance on Firm Performance in the United States

In response to the accounting scandals of the late 1990s, regulators adopted changes to corporate-governance rules in 2003 in an effort to restore investor confidence in the stock market. The purpose of this study is to determine whether the changes to board leadership structure imposed on U.S. companies affected firm performance as measured by operating return on assets. This study was conducted with a sample of 857 publicly traded companies listed on the New York Stock Exchange and 11,632 firm-year observations from the period 1997-2012. Using a difference-in-difference estimator and multivariate analysis, we found a positive and significant indication that changes to board leadership structure improved the long-run performance of firms that were previously insider controlled. Our study indicates that some firms were not ideally structured prior to 2003 when the changes in corporate-governance rules took effect for publicly traded companies listed on the New York Stock Exchange.

How Are Company Size, Financial Performance and Corporate Governance Related to Directors' Remuneration?

This study examined the relationship between the company-specific characteristics, namely, company size, company performance, and company leverage and the corporate governance attributes of a company which includes CEO duality and remuneration committee independence as the predictor factors that determine directors’ remuneration. A sample of 260 public listed companies on Bursa Malaysia was selected using stratified random sampling for the financial reporting of 2018. All data concerning the company characteristics and corporate governance attributes were obtained from the annual reports of the companies, which can be accessed from the Bursa Malaysia website. Pearson correlation and multi-regression analysis were used to analyse the data to determine the relationship of the predictor variables with director remuneration. On the one hand, the results of the study showed that directors’ remuneration is positively and significantly related to the size of the company. On the other hand, the financial performance of a company is positively but weakly related to directors remuneration. The remaining predictors have no relationship with directors’ remuneration. The finding suggested that the key determinant factor of directors’ remuneration is company size whereas company performance may have a small impact. Lastly, company compliance with the recommendation of the Malaysian Code on Corporate Governance did not guarantee the effectiveness of the monitoring function of the remuneration committee in ensuring that directors’ remuneration is commensurate with company performance. The result of the study provides additional evidence and support that company size and financial performance are linked to director remuneration. Also the finding of the study reconfirmed prior study that board leadership structure (CEO duality) and remuneration committee independent have no impact on directors’ remuneration.

Independent Directors, Board Leadership Structure and Corporate Financial Performance: Evidence from Jordan

Independent Directors, Board Leadership Structure and Corporate Financial Performance: Evidence from Jordan

Analyzing Why Organizations Differ in Board Composition

In this paper, building upon several theories (agency theory, stakeholder theory, and resource dependence theory) and by utilising data from 161 Greek manufacturing companies that were listed in the Athens Stock Exchange on the 31st December 2008, the authors explore the relationships between the organisational characteristics of the firms (organisational age, organisational size, and years listed in the stock market) and the board configuration (board size, board leadership structure, and directors' dependence/independence). The motivation of the study was based on both the peculiarity of the Greek context in the front of a strong economic crisis, but also in trying to establish relationship of board characteristics with factors that are understudied. Both descriptive and inferential statistics (ANOVA tests) were utilised to answer the research questions. Interestingly and in alignment with the literature, the findings showed that larger organizations tend to have larger boards and greater proportions of external and independent directors. However, no more strong relationships have been identified between the organisational characteristics and the board configuration. The paper contributes by suggesting that while board configuration is being determined by factors like the legal context of the country and the broader external environment suggested by the literature, various company characteristics can explain some of the board characteristics. Finally, it is worth mentioning that this study examines the listed Greek manufacturing companies during very turbulent times, the start of the financial crisis in Greece, which may have an impact on the configuration of the boards at that time.

Corporate governance reporting in Bangladesh

PurposeThis study aims to investigate the extent and nature of corporate governance reporting (CGR) in corporate annual reports of Bangladesh. The aim of the study to test empirically the relationship between corporate governance (CG) and CGR by the listed companies in Bangladesh. The CG examined the proportion of independent directors, board leadership structure, board size, ownership structure and audit committee size.Design/methodology/approachThe study is based on a sample of 86 listed non-financial companies in Dhaka stock exchanges (DSE) from the period of 2015-2017 and all the companies are selected by judgment Sampling. The study has been used as an unweighted relative disclosure index for measuring CGR.FindingsThe empirical results indicate that board leadership structure (BLS) is positively associated with the level of CGR. In contrast, the percentage of equity owned by the insiders to all equity of the firm is negatively associated with the level of CGR.Practical implicationsFindings of this study have important implications for regulatory authority, enforcement agencies such as Institute of Cost and Management Accountants of Bangladesh, Institute of Chartered Accountants of Bangladesh, Bangladesh Securities and Exchange Commission, DSE, policymakers, shareholders and others who have an interemaammast in CG.Originality/valueFinding of the study will be a benchmark for policymakers and implementers in torching the avenues of improvement in raising the level of CG reporting.