Board Of Directors Research Articles

Editorial office and Board Members

Editorial office and Board Members

AI‐Powered Boardrooms: The Future of Governance

Meghan Anzelc, Ph.D., is the founder and CEO of Three Arc Advisory. Christina Fernandes‐D'Souza is the firm's vice president of Data Science. In this article they discuss what board directors should do to govern their own use of AI in the boardroom; the current state of AI offerings; areas of higher and lower risk use and how to know if AI is the wrong solution.

Busy Independent Directors and IPO Company Earnings Management: Evidence from China

This study investigates the effect of busy independent directors on earnings management in Chinese initial public offering (IPO) companies from 2010 to 2020. Using various measures of busy independent directors, the results indicate that directors in IPO companies play a significant role in supervision and governance, thereby significantly mitigating earnings management. Busy independent directors, serving on multiple boards, may face time constraints, but, intriguingly, companies with such directors show a lower inclination for earnings manipulation. This suggests that despite potential time pressures, the independent oversight provided by these directors serves as a deterrent to financial reporting manipulation in the context of Chinese IPOs, underscoring the importance of robust corporate governance structures for transparency and reliability. Additionally, this study identifies specific conditions that amplify the constraining effect and finds that the effect of busy independent directors on earnings management in IPO companies is more significant in companies with high compensation for independent directors, independent directors serving off-site, and companies that receive higher media attention. Mechanism testing indicated that busy independent directors mitigate IPO firms’ earnings management by engaging reputable audit firms and enhancing the effectiveness of internal controls. This nuanced analysis offers valuable insights into how busy, independent directors actively contribute to alleviating the risks associated with earnings management during the IPO process. This study enhances our understanding of the governance benefits of active independent directors in multiple roles and offers novel perspectives on how stakeholders can influence and constrain earnings management in IPO companies.

Meet the Editorial Board Member

Meet the Editorial Board Member

Full title (Editorial Board Members)

Full title (Editorial Board Members)

Meet the Editorial Board Member

Meet the Editorial Board Member

Feature Paper Collection of Mathematical and Computational Applications—2023

This Special Issue comprises the second collection of papers submitted by both the Editorial Board Members (EBMs) of the journal Mathematical and Computational Applications (MCA) and the outstanding scholars working in the core research fields of MCA [...]

Meet the Editorial Board Member

Meet the Editorial Board Member

Meet the Editorial Board Member

Meet the Editorial Board Member

Fostering leadership development and growth of nurse leaders: Experiences from Midwest Nursing Research Society Leadership Academy

Leadership development and growth of nurse leaders is critically important for the thriving of the nursing profession. Formal leadership training programs are helpful in building leadership knowledge and skills. The Midwest Nursing Research Society (MNRS) launched the Leadership Academy (LA), a new initiative to foster leadership development among MNRS members and intentionally create a steady pool of members prepared to step into MNRS leadership positions. Mentoring by an experienced board member is a key component. The purpose of this article was to describe the experiences of a mentor and mentee dyad through the MNRS LA and discuss their perspectives on fostering leadership development and growth. The success of a leadership development program has a far-reaching impact on novice and potential future leaders. A tailored leadership mentoring relationship helps increase one’s self-confidence in being a leader and provides individualized leadership development opportunities. Engagement of both the mentee and mentor in the leadership mentoring relationship is a key to ensure an optimized leadership mentoring experience.

Does board gender diversity improve stock liquidity?

PurposeFirms with gender diverse boards have been shown to have increased transparency and disclosure, resulting in reduced information asymmetry, which is a key factor influencing stock liquidity. This paper explores the influence of information asymmetry resulting from board gender diversity on stock liquidity. We examine the impact of gender diverse firms on stock liquidity in US listed firms from 2006 to 2022, capturing 28,280 firm-year observations across 4,349 firms. Using mediation models, we distinguish between direct and mediated effects to examine the impact of gender diverse boards on three dimensions of stock liquidity. We find a positive and significant relation between board gender diversity and stock liquidity, and our findings highlight the substantial mediating role of information disclosure in this association. To address concerns of endogeneity, we use instrumental variables regression, and our conclusions remain robust to a range of alternatives.Design/methodology/approachTo investigate the association between board gender diversity and stock liquidity and the underling mechanism that drives the relation, we utilize a dataset comprising 4,349 listed US firms from 2006 to 2022. We adopt a comprehensive approach to measure stock liquidity that spans three dimensions: Amihud illiquidity (LIQ) as a representation of price impact, the quoted spread (SPREAD) to gauge transaction costs and the stock turnover (TURNOVER) to assess trading frequency. To evaluate board gender diversity, we examine female directors and female independent directors, utilizing both the percentage and the presence (as a binary variable).FindingsThe results of our analysis reveal not only a statistically significant effect of board gender diversity on liquidity but also demonstrate its economic significance. One standard deviation increase in the percentage of female directors (12% more female directors) is associated with a 5.8% decrease in price impact, a 5.1% reduction in transaction costs and a 3% increase in trading frequency. These findings highlight the material economic importance of the relationship, which stands in contrast to previous studies reporting only a 1% change in average stock liquidity in the Australian stock markets (Ahmed and Ali, 2017). To further investigate the underlying mechanism driving the association between board gender diversity and liquidity, we employ mediation models to separate the direct and mediated channels. Our results indicate that the effects of the percentage of female directors are mediated on liquidity (LIQ, SPREAD, and TURNOVER) through information disclosure, albeit with a relatively small magnitude (mediation proportion is 18.2, 3.9 and 22.9%, respectively).Research limitations/implicationsWe include a comprehensive set of variables in our analysis and adopt an instrumental approach to mitigate endogeneity concern. However, we acknowledge the possibility of omitted variable biases or reverse causality in our empirical analysis.Practical implicationsOur study contributes to the understanding of the association between board gender diversity and stock liquidity, focusing on the underlying mechanisms. Gender diversity on boards enhances corporate governance, leading to reduced managerial opportunism (Adams and Ferreira, 2009; Nielsen and Huse, 2010). This, in turn, increases information transparency and results in increased stock liquidity. By exploring the empirical evidence of the impact of gender diverse boards on stock liquidity through the information channel, we provide valuable insights to the existing literature. Our study uses US data to examine this association, addressing the small sample concerns of prior research that may have contributed to inconsistent findings.Social implicationsThis research can drive both economic and social transformations as it provides evidence that gender diverse boards lead to improved market outcomes.Originality/valueOur study differs from previous research by incorporating all three dimensions of liquidity, ensuring a comprehensive analysis. Through our investigation, we aim to deepen understanding of how gender diversity on corporate boards shapes market dynamics and contributes to understanding of corporate governance and market efficiency. Our study investigates how the impact occurs by employing mediation models to separate the direct and mediated channels of impact. We show that the effects of gender diverse boards on liquidity are mediated through information disclosure.

Who, Republican or Democrat CEOs, laughs last? Political cycles in the market for corporate directors

This paper examines the relationship between CEOs' political preferences and their post-retirement directorship opportunities, proposing that political donations may serve as signals of political influence or connections that impact career prospects in the market for corporate directors. Using data on political contributions from 1998 to 2016, we explore whether CEOs' political affiliations create a cyclical pattern in the professional labor market, favoring those aligned with the ruling party. Our analysis reveals that Republican partisan CEOs are more successful in securing directorships under Republican regimes (George Walker Bush, 2003∼2008), while the reverse holds under Democratic regimes (Barack Hussein Obama, Jr. 2009∼2014). These results remain robust after addressing potential endogeneity using presidential election outcomes as an instrumental variable.

State Member Board Briefs

State Member Board Briefs

A Comparative Analysis of Board Qualities and Performance of Listed Deposit Money Banks in Nigeria and Ghana

Disclosure of board information is crucial for good governance, risk management, and stakeholder relations in the banking sector. The board of directors’ quality is crucial in setting strategic direction and ensuring effective governance. This study comparatively examined the qualities of the board of directors of listed deposit banks in Nigeria and Ghana and assessed the effects of the board qualities on the financial performance of banks in the two countries. The study used an ex post facto research design, involving 19 deposit money banks listed on the Nigerian Exchange Limited and Ghanaian Stock Exchange. Data was collected from audited annual reports and analyzed using descriptive and inferential statistics. The descriptive analysis includes mean, median mode, minimum, and maximum among others while the inferential analysis includes independent t-tests and panel regression. The study reveals that the board of listed deposit money banks in the Nigerian exchange group meets more frequently and is more independent than those in the Ghanaian stock exchange, and their board size is larger than in Ghana. Board female gender diversity of listed deposit money banks on the Nigerian exchange group is not significantly lower than the board female gender diversity of firms listed on the Ghanaian stock exchange. The study reveals that board gender diversity doesn’t significantly impact the financial performance of listed deposit money banks in Nigeria and Ghana. However, board independence has a negative effect in Nigeria, while board meetings negatively affect performance in Nigeria. Board size also has a positive effect in Nigeria. The study recommends that directors of listed banks in Nigeria should reduce the number of their meetings or expenses of the meeting because it is reducing the profitability of the companies. The study also recommends that the banks in Ghana should provide regular training for independent directors to enhance their understanding of the industry.

Climate change on the board: navigating directors’ duties

ABSTRACT A noteworthy trend within the surge in corporate climate litigation is the increasing focus on personal responsibility of corporate directors. In 2023, ClientEarth commenced a derivative claim against Shell and its directors in the English courts, arguing that those directors were in breach of their directors' duties under the Companies Act 2006. This article analyses the claimant's arguments, examines the basis upon which the court dismissed the claim and identifies the procedural challenges that are likely to be faced by future claimants in commencing similar claims. In light of the rising trend in shareholder activism, coupled with the ever-increasing regulatory requirements to strengthen corporate human rights and environmental performance, the article anticipates further attempts to bring derivative claims against directors for failing to take action to address climate change risks. It provides suggestions for the sorts of arguments that may have greater prospects of succeeding before the English courts.

The Impact of Promoter on Firm Value: Evidence from Emerging Economies

Using panel regression on a sample of 1,532 firms listed on the National Stock Exchange (NSE) of India and 450 firms in the Shanghai Stock Exchange (SSE) of China, this study examines the impact of promoter ownership on firm value. We find that promoter have positive impact on firm value in China while it is inversely related to India due to the entrenchment effect or opportunistic behaviour of the promoter. We provide evidence that the opportunistic behaviour of the promoter can be reduced only through monitoring by the corporate governance mechanisms such as board of directors. We contribute to the existing literature on corporate governance and corporate finance by examining the link between promoter ownership and firm value. Our results help the regulators and policy makers to formulate a regulation that reduces the opportunistic behaviour of promoters.

Exploring the synergy of corporate gender diversity, sustainability committee, and reporting ESG practices: An international evidence

This study delves into how gender diversity on the corporate board shapes the reporting of Environmental, Social, and Governance (ESG) practices. Besides, it examines the moderating role of a sustainability committee in the nexus between gender diversity and reporting of ESG practices. It analyzes an international sample of the S&P Global 1200 index from 2011 to 2022. The ESG reporting is based on the Refinitiv disclosure index of the firm ESG scores. The study utilizes various statistical models to provide precise empirical evidence, including fixed effects, a two-stage least squares (2SLS), and a generalized method of moments (GMM). The results demonstrate that disclosing ESG practices is a positive function of the percentages of corporate female board members and executive female directors. This suggests that companies with greater gender diversity disseminate more information about their ESG practices. Besides, a corporate sustainability committee strengthens the positive nexus between reporting ESG performance and corporate female board members and executive female directors. This underscores the moderating role of the sustainability committee in simplifying the nexus between gender diversity and reporting ESG practices. The results offer substantial implications for the leverage of gender diversity on ESG reporting. Policy-setters should actively support and promote greater corporate gender diversity, recognizing its pivotal role in fostering transparency. Additionally, a dedicated sustainability committee is crucial in enhancing the reporting of ESG performance and aligning business practices with sustainable development goals.

Veeraswamy Seshiah: Father of Gestational Diabetes in India

Professor Dr. V. Seshiah, MD, FRCP, DSc, (Hony), is a distinguished professor at Tamil Nadu's Dr. MGR Medical University and established the First Department of Diabetology in India at Madras Medical College in 1978. He was the patron of the Research Society for the Study of Diabetes in India and the founder patron of the Diabetes in Pregnancy Study Group, India (DIPSI). Additionally, he served as the Vice-Chair of the Executive Board of the International Association of Diabetes and Pregnancy Study Group. Dr. V Balaji and Dr. V Seshiah Diabetes Care Center & Research Institute, which he founded, received the Army Decorations "SAMAR SEVA STAR" and "SAINYA SEVA MEDAL" in 1965 with clasp HIMALAYAS. Dr. Seshiah was also the recipient of the DR. B.C.ROY National Award was given in 1988 for developing diabetology as the Indian College of Physicians provided a specialty in the country and the Master Teacher Award. Moreover, he was honored with the Lifetime Achievement Award by the International Diabetes Federation in 2017, being the first Indian to receive this award. In 2022, the President of India, Mr. Kovind, presented the Padma Shri to Dr. Veeraswamy Seshiah for Medicine.

Parenting behaviour and student discipline in public boarding secondary schools in Western region of Kenya

Discipline in schools is an issue that especially concerns educators, parents, and other stakeholders. In an environment that lacks order and discipline, it is impossible for students to learn effectively. Thus, order and discipline are indispensable for achieving positive educational results. The family assumes a pivotal role in shaping the early years of an individual. The purpose of this research was to investigate the influence of parenting behaviour on student discipline in public boarding secondary schools in Western region of Kenya. Family composition and structural-functionalism theories served as guiding principles for the research. The investigation was conducted using an ex post facto design. The study's target population consisted of 5583 class teachers and 369 deputy principals (administrators-in-charge) from 369 public boarding secondary institutions. The sample included 123 deputy Principals and 558 class teachers from the 123 randomly selected schools. Simple random sampling was used to select 558 class teachers while purposive sampling was used to select 123 deputy Principals. For the purpose of data collection from the participants, a questionnaire and an interview schedule were employed. The assessment of the instruments' reliability was conducted using the test-retest method, results of the pilot study reveal that all scales were trustworthy because their reliability values were more than the required threshold of 0.7. Data was analyzed using frequency, percentages, weighted averages, correlations and multi-regression analysis. The study concluded that parenting behavior influence the discipline of students in public secondary schools. Therefore, it was recommended that school management boards should organize for the sensitization meetings on effective parenting behaviour, this will enable curb indiscipline among students.

Corporate Boards and Firm Value: Evidence from Nigeria

Aim: The basis for the formation of the corporate board is to, among others, give strategic direction to the firm, monitor the activities of the salaried agents and reduce the likelihood of disincentive to investment. The aim of this study is to examine the efficacy of corporate boards in relation to the value of firms listed in Nigeria. Study Design and Methodology: It is a cross-sectional research design that empirically examined the influence of board mechanisms and Tobin’s Q of firms listed on the Nigerian Stock Exchange. The study used annual data of a panel sample of 85 firms from 2004 through 2023, It applied a Generalized Least Squares (GLS) econometric technique. Place and Duration of Study: This study examined the role of the boards of firms listed on the Nigerian Stock Exchange between 2004 and 2023. Results: The findings argued in favour of smaller boards, increased board independence and higher market capitalisation since they showed significant improvements in value of the firms in the sample. The findings imply that smaller boards that are highly independent tend to have better corporate governance and thus, superior firm value. Conclusion: In conclusion, the results advocate that the regulatory agencies and boards of the studied firms enact policies that will encourage minimum board sizes that are sufficiently independent.