Board Of Governors Research Articles

Corporate Governance and Financial Performance of Selected Commercial Banks in Kenya

The primary purpose of this study was to determine whether or not corporate responsibility had an impact on the bottom lines of a sample of Kenyan commercial banks. The research's specific goal was to ascertain how compensation for boards was calculated, consumer protection, nonperforming loans, and risk management on the financial performance of selected Kenyan commercial banks. This research was based on the following theories: agency theory, resource dependency theory, control theory, public choice theory and bank risk management theory. The present investigation employed an expressive research strategy. The 44 Kenyan business banks that were the focus of this analysis as at December 2022. The target respondents were the chief finance officers and credit officers. This study used a census-style methodology because the quantity of participating banks was manageable. Surveys that were semi-structured with a mix of open-ended and closed-ended questions were used to gather primary data. Descriptive statistics like frequency, average, and deviation from the mean, and inductive statistics like regression and correlation analyses were used to examine the data. After that, we use tables and figures to display the results. While respondents generally accept that board remuneration and consumer protection measures have a good impact, the statistical significance differs. NPLs are found to have a negative impact on financial performance, which is consistent with current research advocating responsible lending practices. Risk management is also seen as important; however, opinions differ. The findings of the study emphasize the significance of risk management and the good impact of board compensation and consumer protection, as well as the negative impact of NPLs. Transparent board compensation schemes, strong consumer protection measures, careful NPL management, and thorough risk management methods are among the recommendations. The study recommends future research areas to further the study on the impact of corporate supremacy in financial success. Keywords: Corporate governance Board compensation, Consumer protection, Nonperforming loans, Risk management, financial performance

Gender, Sustainability, and Urbanism: A Systematic Review of Literature and Cross-Cluster Analysis

Gender diversity and equality have a significant influence on policymaking regarding sustainable development, environmental issues, and urbanism. This study examines the general bibliometric outlook and research patterns of publications on gender equality, urbanism, and sustainability to provide a general perspective on the relevant literature and trends for institutions and scholars who wish to conduct research within the framework of gender, sustainability, and urbanism. The findings of this study show that there are a limited number of studies dealing with gender equality, sustainability, and urbanism. The study analyzed 308 papers in total, utilizing data mining and analytics techniques such as t-SNE and SNA for a systematic review process. The study utilized the PRISMA protocol as the research method. The results showed that research on the frame of gender, sustainability, and urbanism peaked in 2021, and the top countries for studying gender, sustainability, and urbanism are the USA, the UK, Spain, and China. The research fields that contributed the most were those dealing with environmental studies and green and sustainable technologies, followed by those dealing with business and women’s studies. The following three thematically inclined clusters were revealed by the t-SNE analysis: (1) Gender Diversity, Corporate Sustainability, and Board Governance; (2) Gender, Environmental Sustainability, Sustainable Development, and Policy Agenda; and (3) Gender, Sustainable Urbanism, and Community Development. The findings of the study revealed that fostering gender equality with policies such as gender mainstreaming, as in SDG 5 and SDG 11, and gender equality strategies of the EU or UN will help to overcome discrimination against women in the urban space and empower sustainable development.

Keep board recruitment focused, but avoid myopic approaches, experts say

When it comes to recruiting new members for your board, it's common for nonprofit leaders and boards to start with people that have established social and/or professional connections to current board members. And this approach can seemingly makes sense, seeing as your current board members likely know many people who have valuable skills and experience that come into play in board governance.

Preparing School Boards for Sustainable Leadership: How Does Your State’s Policy Equip School Board Members?

ABSTRACT In an era of increasing political and social divisiveness, school boards across the country face pressure to maintain effective governance amongst relentless pressure. Most school board members lack the experience to know how to effectively serve, thus, training is a necessary resource to ensure effective board governance and retain board members. This study provides an overview of states that have policies dictating professional learning requirements of new and veteran board members. Results indicate many states have no requirements for time or topics. State agencies should consider requiring professional development for school boards and superintendents on effective governance and evaluation.

Governing nonprofits under competing institutional logics: The implementation of board governance in China

AbstractPrivatization reform originated in Western countries and was translated across political regimes. While extensive literature discusses the practices of privatization in liberal democracies, little has been written on its implementation in authoritarian contexts, where the logic of privatization is incompatible with the logic of authoritarianism. This study explores the adoption of a specific administrative model promoted by the privatization reform: nonprofit board governance in Shenzhen, China. We find that, although the nonprofit board is the formal governing structure, regulatory agencies constrain the autonomy of boards, decoupling governance practices from board governance. Two organizational‐level contingency factors—institutional origins and political risks—help explain the balance of the competing logics and the degree of decoupling from board governance. These findings suggest that, within the global privatization movement, the seemingly converging administrative structures embody divergent practices when adapting to local contexts.

THE RELATIONSHIP BETWEEN CEO DUALITY AND FIRM PERFORMANCE IN LIGHT OF BOARD SIZE AS A MODERATOR

This research investigates the intricate link between CEO duality and company performance in Texas service organizations while illuminating the moderating role of the number of directors. To accomplish this, the study conducts a comprehensive analysis using a dataset of Texas service companies over a specific time frame. Rigorous statistical methods, including multiple regression analysis and moderation analysis, are employed to assess the relationship between CEO duality, board size, and company performance. Various performance metrics, such as return on assets (ROA), return on equity (ROE), and Tobin's Q ratio, are used to measure business performance. Panel data from 2018 to 2020 are gathered from published accounts, and the research utilizes IGLS regression models to test the theory. The findings reveal a complex relationship between CEO duality and business performance in Texas service firms, with CEO duality significantly correlated with firm performance, and board size playing a substantial moderating role. This study offers valuable guidance to the boards of directors and executives of Texas service organizations on optimizing board sizes and governance structures to enhance company performance. It also advances our understanding of the nuanced interactions between CEO duality and board size within the broader corporate governance literature, emphasizing the context-specific nature of these effects. Additionally, this research contributes to the field by examining these dynamics within the unique context of Texas service organizations, shedding light on their distinct characteristics and governance requirements compared to businesses in other regions or industries.

Board diversity and shareholder voting

The lack of diversity across gender and race of corporate boards has been one of the most significant issues in corporate board governance in recent years. Given the critical role that shareholders have in approving director appointments, we analyze voting patterns in director elections to investigate whether and how shareholders value board diversity. Using a broad sample of director elections from 2008 through 2018, we find evidence that shareholders provide greater voting support for diversity on boards, particularly gender diversity. Our findings also indicate greater additional support for diverse boards rather than for individual candidates. However, the magnitude of incremental voting support for diversity is small, and we find little evidence that the additional support is sufficient to affect voting outcomes. These findings persist over time and across key institutional shareholders who have been some of the most outspoken proponents of board diversity (i.e., SRI funds), questioning shareholders’ commitment to promoting board diversity.

What Matters for Corporate Cash Holdings Board Governance, Financial Constraints, or Interactions?

Corporate cash holdings have received increased attention from researchers and practitioners as cash management is a crucial task for executives. Holding too much cash can result in low returns and mismanagement by managers. Conversely, holding low cash reserves can lead to missed investment opportunities. The present study examines the relationship between board governance, financial constraints, and corporate cash holdings. The robust fixed-effects method is used in this study to analyze 860 A-listed firms in China from 2005 to 2020. An index is designed to measure board effectiveness, while financial constraints are measured using Z-score, the Kaplan and Zingales index, and the SA index. The major findings document that the financially less constrained firms hold more cash when there is an effective board governance. Furthermore, financially less constrained firms have more robust board governance to minimize the agency concerns of managers and shareholders. This research provides an inference for stockholders’ activism connected to the cash holdings of the financially constrained and less constrained companies. The findings offer useful policy implications for stakeholders to reform contemporary cash holding policies. Specifically, understanding the role of an effective governance system for financially less constrained firms would help minimize the potential agency conflict. JEL Classification: G34, O16, G32, F34

Board Informal Hierarchy and Digital Transformation: Evidence From Chinese Manufacturing Listed Companies

Board informal hierarchy plays a crucial role in board governance and corporate strategic decision-making. The article empirically examines the impact of board informal hierarchy on corporate digital transformation based on relational contract theory, using a fixed-effects model with Shanghai and Shenzhen A-share listed manufacturing companies from 2012 to 2019 as research subjects. The findings of this study demonstrate a positive correlation between board informal hierarchy and digital transformation. Specifically, the presence of a chairman with the highest rank in the informal hierarchy strengthens this relationship, while the presence of a CEO with the highest rank weakens it. Mechanistic analysis shows that informal hierarchy accelerates digital transformation through three channels: improving board decision-making efficiency, mitigating management myopia, and facilitating information communication. This study extends existing research. On the one hand, this paper explores the drivers of digital transformation in manufacturing firms at the level of corporate governance and board characteristics. The findings provide empirical evidence to support the understanding of transformational change behaviors of manufacturing enterprises in the digital economy. On the other hand, it also opens up the “black box” of the internal operation of the board and provides valuable lessons for strengthening board governance. JEL Classification: D21; M12; Z13.

Theoretical Framework for Board Structure and Its Relationship with the Performance of Commercial Banks in Vietnam

<p>In order to build up the theoretical framework to examine the relationship between board structure and the performance of commercial banks in Vietnam, this paper examines the wide range of literature reviews on corporate governance factors, agency theory, and board structure attributes. This framework is served as an academic premise for further studies in the corporate governance and banking sector in the Vietnam context.</p> <p> </p>

Workplace democracy in action? Assessing employee board representation in Australian government agencies

AbstractVarious scholars and political actors advocate workplace democratisation to give employees greater influence over decision‐making. Many suggest employee board representation (EBR) as a mechanism to facilitate this, but some question how influential employee board representatives (EBRs) are and whether they represent their colleagues’ views. This study investigates the extent to which EBR contributes to workplace democratisation, via a comparison of three Australian public sector organisations. The study found EBRs exerted significantly more influence at the Australian National University than at the Australian Broadcasting Corporation and the Australian Film Television and Radio School. Most EBRs wanted to draw upon staff experiences but their communication with colleagues was often constrained. Variances of influence were explained by the number of EBRs, the actions of the Chair, chief executive officer, government, and other board members. Two findings stand out as unique contributions: the importance of appointment powers to EBR influence in the public sector, and EBRs’ limited influence on labour issues in the Anglosphere due to the adversarial system of labour bargaining being positioned largely outside the boardroom. The study concludes that EBR is a non‐tokenistic form of workplace democratisation, albeit with a specific scope, which has utility within a mix of democratising mechanisms.Points for practitioners Most EBRs exerted a limited or moderate influence on decision‐making, but others exerted more significant influence. They were most influential on matters related to their experience and expertise and were largely unable to influence workers’ pay, conditions, and other labour issues. Most EBRs did not represent their colleagues in a transactional or direct sense, but drew upon their experiences as staff members when making decisions. However, EBRs had fluctuating issues communicating with their fellow employees, largely due to managerial direction around confidentiality. The number of SEDs on the board and the actions of other board members, the Chair, chief executive officer, and the government explained the variances in SEDs’ influence between agencies. This study's findings regarding EBR influence were middling compared to European research, but appointment powers were found to be particularly important in the public sector context. EBRs’ influence was found to be limited on labour issues, suggesting a potential clash between the corporatist inclination of EBR and the adversarial system of labour bargaining prevalent in the Anglosphere. Elected EBRs offer employees a non‐tokenistic form of representation but within a limited scope of strategy and oversight. Given factors that constrain SEDs’ influence and representativeness can be at least partly countered by policy design and political leadership, these findings bolster the policy case for extending EBR throughout the public sector.

Board Attributes and Firm Performance of Non-Financial Listed Firms in Pakistan: Role of Ownership Structure

Purpose: This research intends to explore the impact of board attributes on the performance of non-financial listed firms in Pakistan and how ownership structure plays a moderating role in shaping this link. This research posits that institutional shareholders possess motivations to enhance board governance due to their advanced financial knowledge and managerial expertise.
 Methodology: Four attributes of the board (board size, women on board, board independence, and board busyness) were studied to see the impact. The firm performance was measured using Tobin Q. The present study employs 80 non-financial listed firms in its sample, and the multiple regression approach was used to inspect a 12-year panel dataset.
 Findings: The results discovered that board size has a positive and significant influence on the performance of companies. However, board independence and women on board have a significant negative effect on firm performance. Moreover, the outcomes of this study indicate that the ownership structure acts as a moderator, influencing the correlation between board attributes (board size and board busyness) with non-financial listed firms’ performance in Pakistan.
 Implications: The current study provides useful insight into this relationship to the policymakers, government, researchers, and other stakeholders. Therefore, based on this study's findings, non-financial firms listed in Pakistan should consider adopting institutional shareholding as a strategy to strengthen their capacity to secure long-term financing to support their growth initiatives.

Do Family Firms Issue More Readable Annual Reports? Evidence From the United States

Using a sample of 22,442 firm-year observations for 3,721 U.S. listed firms, we show that family firms, on average, issue annual reports with higher readability than non-family firms. Higher readability could occur due to lower obfuscation or less information conveyance. By controlling complexity and choosing readability measures linked to obfuscation, we attribute the higher readability to lower obfuscation. Our investigation into the heterogeneity in family firms shows that the positive effect of family control on reporting readability exists for eponymous family firms but not for non-eponymous family firms. We also find that family firms managed by founders or heirs issue more readable 10-K reports than non-family firms, but family firms managed by outsiders do not exhibit such a difference. Cross-sectional analyses show that the difference in readability between family and non-family firms diminishes for firms with more earnings manipulation, weaker board governance, and dual-class shares. Further, we find that investors perceive family firms’ annual reports with higher readability to be more informative. Finally, we use state-level succession tax cuts as an exogenous shock to link the higher readability to family insiders’ incentives and preferences. Our findings are consistent with the view that family insiders’ incentive to maintain family reputation contributes to lower obfuscation in 10-K narrative disclosures.

Improving Islamic bank performance through agency cost and dual board governance

Purpose This study aims to examine the impact of agency cost, Islamic board characteristics and corporate governance on the performance of Islamic institutions. Design/methodology/approach Based on the selected criteria, 92 Islamic banks (IBs) from 20 countries were selected for further research. The authors used generalized method moments (GMM) estimation method. The agency cost and Shariah board characteristics are the explanatory variables. The author uses the age of the bank and the size of the bank for variable control. Findings Empirical results indicate that first, agency costs represented by cast/total assets negatively affect IBs’ return on equity and net income. As agency costs rise, IBs’ financial performance declines. Second, Shariah supervisory board (SSB) size and board independence affect IB performance. The study found that SSB size positively affects IB performance. Research limitations/implications This research contributes to the literature on IBs in different countries, which policymakers and practitioners can use to improve agency cost functions and Shariah board characteristics. Second, this analysis shows that IBs require specific attention for agency charges, given their operations and business structures. This study contributes to agency theory, which requires Islamic banking information and practices. Finally, the author has aided regulators and IBs by identifying the sources of agency cost practices that can be resolved. The other bank governance contribution is twofold. First, the author studied dual board governance in IBs (SSB and ordinary boards of directors). Second, the author examines how SSB and traditional board governance affect IB performance. This research focuses on banks listed on stock exchanges in the 20 countries analysed. Practical implications The research has policy and practical implications for central banks and IBs. By outlining appropriate regulatory guidelines and reporting systems, regulatory authorities can ensure Sharia compliance and protect the independence of IB Shariah department officers. Regulators and relevant stakeholders must ensure Sharia compliance, audits, inspections, reporting and accurate disclosure for IBs. Originality/value This paper offers original contributions to professionals in the field of IBs and stakeholders investigating the relationship between agency costs, governance of IBs, characteristics of Islamic supervisory boards and the performance of IBs.

Socio–economic Determinants of Local Tourism Industry Development in Tanzania: A Case of Tarangire National Park, Arusha Region

This study was undertaken in Tarangire national park northern Tanzania looking on local tourism development as literatures shows domestic visitors is growing slowly by 20.4% in 2022 from 14.1% on 2019 comparing to international visitors which rose by 81.9% in 2022 from 40.4% in 2019 visiting various tourist destinations in Tanzania. Therefore, the study aimed to examine the perception of local community on local tourism industry and investigating the socio-economic determinants of local tourism development in order to inform the best approaches to be used as a catalyst for local tourism development in Tanzania. The study adopted a mixed research design where quantitative and qualitative research approaches were used. Simple random and purposive sampling was used to select respondents for the study through in-depth interviews, focus group discussions, observation and document review as methods used to collect data. A total of 134 respondents were involved in the study. Logistic regression was used to make analytical statistics for quantitative findings while content analysis was used for qualitative data. The findings revealed that, local visitors had a positive perception on visiting the tourist destinations of the country during their holidays for refreshment and learning new experiences on local tourism activities. The study revealed that, three out of eight socio-economic determinants which are income of the local tourist, promotion of tourist destination and accessibility of the tourist destinations are statistically significant at P< 0.05 with 95% confidence levels. Based on the findings, this study concludes that the will of local community to visit national parks is hindered by low income, low promotion coverage and poor park accessibility. Therefore, for domestic tourism to grow, the study recommends the authority to improve accessibilities whereby local tourist can get in using their own means of transport as to reduce cost of transport (hiring a tour guide truck). Also, Tanzania Tourist Board and other government agencies should strengthen its marketing strategies and dissemination of appropriate information through social Medias. Finally, the tourism stakeholders should create a mechanism that brings affordable price on tourism services especially accommodation and transport in tourist destinations of the country.

Utilize board matrix to focus board recruitment

When it comes to recruiting new members for your board, a frequent place to draw from are people with social and/or professional connections to current board members. This makes sense—after all, your current board members likely know many people who have valuable skills and experience that come into play in board governance.

The relationship between corporate governance and financial performance in the Islamic and conventional banking industries: a Malaysian evidence

Purpose This study aims to investigate the relationship between corporate governance characteristics and the financial performance of both Islamic and conventional banks in the context of an emerging market, i.e. Malaysia. Design/methodology/approach This study includes 300 bank-year observations from Islamic and conventional banks over the period 2010–2021. The dynamic panel model (generalized method of moments [GMM]) was considered the primary estimation model that solves simultaneity, endogeneity and omitted variable problems as most governance variables are endogenous by nature. Hence, static models are considered biased after conducting the DWH test of endogeneity, and considering dynamic panel GMM is valid proven by Sargan and Hensen and first-order (ARI) and second-order (ARII) tests. Findings Based on the regression results, the authors discovered that board size, female participation in the board and director remuneration have a significant positive impact on bank performance, whereas board meetings have a significant negative impact. Furthermore, the board governance structure of commercial banks is found to be more passive than that of Islamic banks. Practical implications The study’s findings added a new dimension to governance research, which could be a valuable source of knowledge for policymakers, investors and regulators looking to improve existing governance mechanisms for better performance of conventional and Islamic banks. Originality/value The goal of this study is to add to the existing literature by focusing on the impact of female board participation and other board governance mechanisms in both conventional and Islamic banks on bank performance.

Corruption at country and corporate levels: impacts on environmental, social and governance (ESG) performance of Chinese listed firms

PurposeAs a consequence of the proposal of the Carbon Neutral and Carbon Peak policy in 2020, the Chinese Government is paying more attention to developing sustainability performance. This study aims to assess the direct influence of country-level and corporate anti-corruption measures on environmental, social and governance (ESG) and its three dimensions, besides ascertaining the moderating role of firm size.Design/methodology/approachThis study used the system generalized method of moments on a sample of 820 Chinese listed firms from 2012 to 2021.FindingsThe findings show that country-level and corporate corruption negatively affect ESG performance. Corporate anti-corruption measures have a more pronounced positive influence on the sustainability performance of small firms than large firms due to the limited resources, lower political position and weaker refusal power of small firms.Research limitations/implicationsThe study has great implications for governments, corporate boards and ESG rating agencies. Government and corporate boards should mitigate the risks of country-level and corporate corruption to attain sustainable development goals. Rating agencies should add country-level and corporate corruption into the ESG evaluation system.Originality/valueSome empirical results have proven that anti-corruption measures help reduce the emission of carbon dioxide, but few evidence shows how country-level and corporate corruption affect ESG and its three dimensions.

Strategic Agility Is the Future Of Association Board Governance

Strategic Agility Is the Future Of Association Board Governance

Diversity, Equity, and Inclusion in the Multiple Sclerosis Community: A Call to Action.

Many medical organizations have begun to confront the longstanding problem of inequalities in health care delivery and the undeniable effect of disparities on health outcomes. The Consortium of Multiple Sclerosis Centers (CMSC) recognizes that disparities affect the lives of many people with multiple sclerosis (MS) and acknowledges the need to address this as an organization. The CMSC recently (1) appointed a task force, (2) conducted a survey of its membership, (3) commissioned this review article and call to action, and (4) formulated a mission statement on diversity, equity, and inclusion (DEI), which was adopted by the CMSC's Board of Governors in March 2023. This paper summarizes recent literature on health care disparities in MS, particularly those relating to race/ethnicity, sexual orientation, and gender identity. It presents findings from CMSC's survey of members' awareness of DEI issues, the need for education and resources for MS care providers, and existing institutional policies on DEI in the members' practice settings. It also presents the task force's recommendations for next steps, which includes the goal of greater diversity in the MS workforce of the future. The CMSC will continue to revisit DEI policies and practices over time with the goal of motivating greater awareness, momentum, and positive changes within the MS community.