Role Of Chairman Research Articles

Informal board hierarchy and corporate ESG performance

AbstractAgainst the backdrop of driving global economic sustainability, corporate Environmental, Social, and Governance (ESG) performance has gradually emerged as a crucial theoretical and practical concern. This study aims to enrich the theoretical understanding of the correlation between corporate governance and ESG. Notably, the theoretical contribution is based on the relational contract theory, indicating the significance of the informal structure and implicit characteristics of the board of directors for corporate ESG performance. Using Chinese listed firms as samples, this study empirically examines and reveals a positive correlation between the informal board hierarchy and corporate ESG performance. Moreover, based on theoretical deduction, this study identifies internal control, innovation efficiency, and financial performance as important mechanisms through which the informal board hierarchy promotes corporate ESG performance. Further analysis indicates that in firms characterized by higher board interaction, lower shareholding concentration, and the combination of the roles of chairman and CEO, the promoting effect of the informal hierarchy on corporate ESG becomes significantly more pronounced. Our findings contribute to the understanding of relational contract theory in the field of corporate sustainability, enriching the literature on corporate governance and ESG, and providing decision‐making references and practical insights for optimizing corporate development.

Climate change disclosure and firm value in a frontier market: Exploring the determinants

AbstractWe examine the factors that influence climate change disclosure and its effects on firm value in the context of Sri Lanka. By leveraging data spanning 1031 firm‐year observations from 2017 to 2022, an innovative machine‐learning technique is employed to quantify the level of climate change disclosure within annual corporate reports. Our findings indicate that factors such as firm size, size of the board of directors, the presence of independent and non‐executive directors on the board, and gender diversity of the board positively impact the extent of climate change disclosure. Notably, CEO duality, where the CEO and chairman roles are held by the same individual, demonstrates a negative relationship with climate change disclosure, suggesting that distinct roles can enhance transparency. This underscores the significant role of robust corporate governance practices in promoting environmental transparency and accountability. Additionally, the paper further assesses the implications of climate change disclosure on firm value, revealing that enhanced transparency in climate change disclosure positively impacts firm value.

A Critical and Comparative Analysis of the Regulation of the Office of the Chairman in Contemporary South African Companies

The role of chairman of the board of directors of a contemporary company has evolved from procedural and ceremonial to complex and demanding. This article examines the appointment, tenure, functions, and liabilities of this position, as regulated by the Companies Act 71 of 2008, the JSE Limited Listings Requirements, and the King IV Report on Corporate Governance for South Africa 2016. The aim is to ascertain whether the guidance provided to chairmen on their appointment, tenure, functions, and liabilities is clear and adequate to guide them on what is expected of them in contemporary companies. Company law in the United Kingdom and Australia is compared because this area of law has been extensively developed in these jurisdictions and may offer guidance on the regulation of the office of the chairman of South African companies. The article contends that the guidance provided to a chairman by South African legal instruments is neither clear nor adequate. It identifies several shortcomings in the regulation of the chairman and makes recommendations to enhance the South African statutory and corporate governance provisions regulating the chairman.

Corporate Governance as Antecedent of Financial Distress: Case Study of Textile Industry of Pakistan

Purpose: The present research studies the effect of corporate governance practices on the level of financial distress of the Textile companies listed at PSX. 
 Design/Methodology: Data from 2019 to 2022 from a sample of 43 companies operating in the weaving, spinning and composite textile industry was assessed in the study. Regression analysis was used to predict the impact of board independence, board size, audit committee independence and duality in the role of CEO and chairman on the financial distress.
 Findings: The findings reveal that board independence, board size and the duality in the role of Chairman and CEO impacts the financial distress level of the companies and that in companies wherein governance structure is strong, the likelihood of financial distress is lower. However, the effect of Audit committee independence is found to be insignificant in this study.
 Originality: This study provides support to the companies in understanding the importance of governance structure and its significance in reducing financial distress level. The findings of the study will be of value to the companies operating in textile sector by enabling them to strengthen their governance structure to address the financial distress situation. Further, this study will help the regulators in drafting the governance requirements for the companies and also educating them about the importance of the latter. In future, other studies using different proxies of corporate governance like gender diversity in the board, number of board meetings and characteristics of audit committee may be conducted..

The impact of chief executive officer’s compensation on agency costs: The role of good corporate governance

Exploring the interplay between managerial compensation, agency costs, and corporate governance, this study investigates how chief executive officer (CEO) duality (combined CEO and chairman roles) moderates the relationship. Using data from Vietnamese listed industrial firms (2013–2022), the research reveals that under weak governance (CEO duality), compensation has no significant impact on agency costs. However, with strong governance (separate CEO and chairman roles), compensation’s influence on agency costs weakens. Building on this analysis, the study proposes recommendations for enhancing corporate governance practices and mitigating the influence of remuneration on agency problems.

Promoting Financial Accountability in Churches & Parachurch Institutions.

All organizations, including churches, must be transparent and responsible with financial resources to maintain confidence and the credibility of their stakeholders. Resource management for churches is an important aspect of the church’s supply chain because churches are obligated to take care of and manage member gifts and donations. It is imperative for churches to set explicit policies for the handling, documentation, and reporting of resources. These policies should address budgetary planning, spending approval, and the implementation of measures to prevent fraud and conflicts of interest. Additionally, churches have the freedom to release annual financial reports or updates that include financial data including sources of income, costs, assets, and liabilities. Annual budgets comprising estimated revenues and expenses are developed and presented to the leadership for review and approval. Churches have an opportunity to have outside professionals conduct an impartial review or audit of their financial records. Additionally, churches have the ability to form finance committees made up of knowledgeable and seasoned experts in human resources, accounting, taxation, and law who can provide expert counsel. A mechanism for tracking and recording member donations ought to be in place within the church. Information regarding the receipt and distribution of funds via various channels of communication should be transparent. Although the aforementioned is commendable, it should be highlighted that accountability by itself faces numerous difficulties, such as opposition to change and the aversion of the status quo to adopting novel approaches. An inability to establish appropriate financial management guidelines could also be the result of ignorance. Complicating matters is the fact that some volunteers may sincerely wish to help but lack the appropriate education and training. Members of the board, for example, who oversee the church's governance, may be financially illiterate. The Chairman's Role in Financial Accountability is only realised when there is an effective implementation of a meaningful mission through an effective board with people elected into offices with well-capacitated board members. Well-functioning boards have a stake in the church's ability to carry out its mission plan. This is accomplished by holding frequent meetings and aggressively managing essential operational tasks, such as monitoring the church budget.

Peculiarities of the Legal Status of the Mayors of Lithuanian Municipalities and the Competencies (Abilities) Necessary for them in the Context of the Change of the Municipal Governance Model in 2023

The purpose of the article is to present some of the results of a research using a questionnaire survey method conducted in February 2023, which aimed to reveal the peculiarities of the legal status and roles (dominant and others) of mayors of Lithuanian municipalities and find out what necessary competences (abilities) municipal mayors must have and in what forms they must be developed, in the presence of two different municipal governance models (the model that was applied until April 2023 and the model that is applied from April 2023). The idea to conduct such research arose just a few months before the new Local Government Law (in its revised version) entered into force in June 2022, which introduced a new municipal governance model and changed the dominant role of the mayor in the municipality. This research also took place a few weeks before the regular municipal council and mayor elections (which took place on March 5, 2023). The particular target group was chosen for this research - the mayors of Lithuanian municipalities who had served in these positions for four or more terms (referred to as "experienced" mayors during the research). No similar research (in terms of purpose and respondents) has been conducted in Lithuania. The results of the research showed that "experienced" mayors have a good understanding of the specifics of the new municipal governance model to be applied from April 2023. They are essentially prepared to take on a new dominant role (the role of municipal executive institution), replacing the previous dominant role (the role of chairman of the municipal council). The results of the research also showed that "experienced" mayors understand well what necessary competencies (abilities) municipal mayors must have, as municipal governance model and the dominant role of the municipal mayor change in it. The results of the research can be useful for improving the legal regulation of the powers of municipal institutions (municipal council and municipal mayor) and the legal framework for their relationships as well as for organizing the the improvement of the competencies of municipal mayors.

The courage to venture: Revealing the effect of social trust on corporate venture capital.

In an uncertain and risky business environment, the decision for corporate venture capital (CVC) often requires courage and determination. This article empirically examines the relationship between social trust and corporate venture capital based on CVC data from Chinese companies spanning from 2006 to 2018. The findings reveal that social trust significantly positively influences a company's willingness and scale of involvement in venture capital. Further analysis highlights the variations in social trust effects under diverse governance environments, particularly in non-state-owned firms and firms with separate CEO and chairman roles. Meanwhile, in regions characterized by a more developed market environment and a robust legal framework, social trust demonstrates a more pronounced motivating effect. Moreover, social trust fosters innovation within CVC deals. Focused on emerging markets, this research delves into the significance of informal institutions in incentivizing corporate innovation and venture capital, offering a fresh perspective on the driving forces behind CVC.

INTANGIBLE ASSETS AND RESOURCE ALLOCATION: INSIGHTS FROM EUROPEAN COMPANIES

This study aims to explore the nexus between CEO-Chair duality, leverage, and investments in intangible assets within the realm of energy companies listed in the European Union (EU) using multi-theoretical lenses. Robust regression is employed to analyse the panel dataset. Energy companies listed in the European Union are analysed for the period 2011-2020. Findings reveal that leverage and CEO-Chair duality exert a positive influence on investments in intangible assets. By separating the roles of CEO and Chairman and adopting appropriate leverage levels, firms can enhance their ability to invest in intangible assets, fostering innovation and improving their competitive position in the market. The results offer valuable insights for academic researchers, practitioners in the electricity and gas industry and investors, aiding in informed decision-making and resource allocation strategies.

Female ownership and female directors’ moderating role as corporate governance monitoring mechanisms in increasing the value of Thai family-owned firms

PurposeThe phenomenon of “broken rungs” has prevented most women from attaining managerial positions relative to men. Despite this gender disparity in management, female executives are more likely to enhance shareholder trust due to higher ethical standards, which can be hypothesized to mitigate the negative impact of family ownership on firm value. Therefore, this study aims to investigate the moderating role of female ownership and female directors in mitigating the unfavorable effects of family ownership on firm value as measured by Tobin’s Q and the Market Value of Equity (MVE).Design/methodology/approachMultiple linear regression is applied to examine the proposed hypotheses, as well as other vital factors, such as board independence (BI), the dual chief executive officer (CEO)–chairman role (CEO duality) and control variables (i.e. firm size, firm age, leverage and investment ratio).FindingsThe results revealed that female directors could buffer the negative impact caused by family ownership, leading to higher firm value, when given a sufficient level of female ownership or the appointment of more female directors, regardless of female ownership levels. Otherwise, female ownership cannot help overcome the negative effects of family ownership in Thai-listed firms. This study also sheds light on corporate governance elements that impact firm value. CEO duality reduces the value of Thai-listed companies, whereas board independence increases firm value.Practical implicationsThe managerial roles for women should be promoted in Thai-listed enterprises. The government can support new laws, policies and programs for embracing a cross-cutting gender perspective. Female network initiatives enable women to advance in their managerial careers.Originality/valueTo the best of the authors’ knowledge, this study intends to fill the research gap by investigating how female directors and owners can moderate family ownership’s influence on the value of firms listed on the Stock Exchange of Thailand (SET), which is one of the emerging capital markets.

The Role of Group Chairman and Extension in Bogor District in Improving the Performance of Fisheries Group in the Pandemic Time of Covid-19

The Role of Group Chairman and Extension in Bogor District in Improving the Performance of Fisheries Group in the Pandemic Time of Covid-19

Impact of Auditor Perception and Audit Evidence on Methods of Calculating State Financial Losses: Evidence from Deputy for Investigation of Indonesia's Financial and Development Supervision Agency

The purpose of this study is to empirically test the impact of auditor perception and audit evidence on the method of calculating state financial losses. The research method that is carried out is the survey method. The population in this study is an investigative auditor with the role of Chairman of the Audit Team, Technical Controller and Quality Controller in the Deputy for Investigation and Investigation of BPKP Representatives who totaled 294 people in positions as of December 31, 2019. Determination of samples using purposive sampling techniques, then the number of samples in this study 221 people according to the criteria. The results of the study proved that the auditor's perception and audit evidence had a significant effect on the method of calculating the country's financial losses. This means that the better the perception of the auditor, it will use the method of calculating the country's financial losses appropriately. And the more audit evidence obtained by the auditor, the use of methods of calculating state financial losses will be more accurate. An accurate method of calculating state losses can determine the magnitude of state losses experienced. The conclusion of this study shows that the better the perception that auditors and auditors can gather enough audit evidence in disclosure of criminal cases of corruption, it will improve the accuracy and accuracy of the use of methods of calculating state financial losses. The implications of this study prove that the answers to the questionnaire from the respondents have not described the opinions of auditors who are not included in the scope of the study, namely the BPK auditors, the Inspectorate General/Ministry of Inspectorate, Provincial/District/City Inspectorates and Public Accounting Firms, so that the results of the study do not describe more accurate results. perfect based on the opinion of the wider respondents

The effect of board size on shareholder value: Evidence from bank mergers and acquisitions

This study examines the effect of board size on the economic impact of bank mergers and acquisitions (M&A) in the US. Using a hand-collected dataset of 508 M&A between 2012 and 2018, we find that board size is negatively related to acquirer excess returns. In an additional analysis, we show that large boards have positive value implications for banks that combine the CEO and chairman roles as well as for large banks. Our findings indicate that a “one-size-fits-all” approach to board size is not necessarily in the interests of shareholders; instead, a more flexible and proactive formulation is needed.

Corporate Governance Mechanisms and the Practice of Sustainability Activities in Nigeria

The paper examined the determinants of sustainability practice (SP) in Nigerian. Two main dimensions of the factors influencing sustainability practice were investigated. First, company characteristics, proxied by firm size (FSIZE), dividend per share (DIPS), Tobin’s-Q (TOBQ), type of industry (IDTY), and profit after tax margin (NPTM). Secondly, the board characteristics, proxied by disclosure of board roles and function (DBRF), chairman roles in the board (DCRB), board members appointment date (BADT), shareholders engagement policy (DISS), and board meetings with attendance records (DMBM). The content analysis approach was introduced to extracted relevant data from 270 annual reports of the sample companies between 2011 and 2020. The Global Initiative Reports GRI (G4) index was used to examine these annual reports. The panel regression result exerts that all of the elements of board characteristics are important determinants of SRP in Nigeria. This suggests that factors related to the identity of companies might influence the disclosure for SRP, particularly when the disclosure is voluntary. Whereas, the proxies of the company characteristics except for DIPS, TOBQ, and IDTY are not important factors, which might be linked with the voluntary nature of sustainability practice in Nigeria. The results further reveal a low level of disclosure. The low rating and disclosure indicated that listed Nigerian firms are still behind when it comes to disclosing and reporting sustainability activities in line with the GRI-G4 guidelines. Therefore, the study is empirically and theoretically relevant, as it might be in need of investigating the commitments and contributions of Nigerian companies and institutions towards a sustainable world by 2030.

Gender Diversity, Political Connections and Environmental, Social and Governance Performance in China: The Moderating Role of Tenure

This study focuses on the two corporate governance variables of gender diversity and political connections and their effects on Environmental, Social and Governance (ESG) Performance in China with the moderating role of tenure. To examine these effects, this study uses a hierarchical regression analysis to check the effects of a firm's corporate governance on ESG performance. This analysis is based on a sample of 143 listed firms that have ESG scores in China over the four years 2015–2018. In specifically, the fixed-effect regression with Driscoll-Kraay (1998) standard errors is used to correct heteroskedasticity-autocorrelation and cross-sectional correlation. Moreover, this study considered the time fixed effect and utilized the instrumental variable approach to control the model's endogeneity. The empirical results from this analysis show that gender diversity and political connection can significantly and positively affect ESG performance. As example of moderating results, Chairman’s tenure inhibits the effects of gender diversity and the political connection on ESG performance. To our knowledge, this study examines for the first time the moderating role of chairman's tenure in the impact of corporate governance on the ESG performance in the context of a weaker regulatory environment. This study's results provide a guide for investors and policymakers to make decisions about investment and ESG policy.

Environmental transparency and performance: Does the corporate governance matter?

This paper aims to understand how corporate governance can impact on environmental transparency and performance. We focus on firms possessing green patents because they are active in proposing new technologies helping to reduce human impacts on the environment. Based on a sample of 361 U.S. firms over the 2007–2016 period, our results show that the number of members in the board was not a factor that helps enhancing environmental performance and transparency. However, the duality of the CEO and chairman roles had a positive impact on environmental performance and transparency. The same result was found for gender diversity among board members and top executives. Furthermore, our results show that younger generations of board members may provide a positive impact on the environmental performance of firms. Finally, the global financial crisis and the level of environmental transparency can impact the corporate governance - environmental performance relationship.

Issues in separating Chairman and CEO/MD roles in Family Firms: Evidence from India’s SEBI reform

This paper analyzes the issues of implementing the new corporate governance code Securities and Exchange Board of India (SEBI), which is Contract agreement reforms (Clause 49) enacted in 2018.This code has ordered Indian companies to separate the role of chairman and chief executive officer (CEO)/managing director(MD)in family firms. Not only that more severe penalties were introduced in 2020 to expand the efficacy of this enactment, the SEBI had also recommended certain companies, in the new contract agreement reform, to implement it by October 01, 2019.There exist many problems on implementation of this reform in India. The separation between the position of Chairman and CEO/MD, which may lead to more independent boards, will provide the essential checks and balances over management’s performances. But, in most Indian promoter-led companies, the posts of chairman and CEO/MD are interwoven. The promoters say that the committee did not recommend that the two posts be separated, and hope the order gets deferred for 2-3 years.A qualitative research analysis is conducted focusing on the implications of this reform on family businesses and their managing boards. Hence, this paper will analyze the present conditions, trends, and future challenges from a theoretical as well as practical perspective. Keywords:Family firms, corporate governance reforms, separated Chairman and CEO/MD, SEBI, India.

Corporate Governance Mechanisms and Firm Performance in Saudi Arabia

This paper examines the impact of corporate governance mechanisms including board size, independence, and meeting frequency, audit committee size and meeting frequency, CEO duality and ownership concentration on the operational, financial and market performance of Saudi listed firms using a contingent theoretical-based framework drawing on agency theory, stewardship theory and resource dependence theory. This study examines 210 listed Saudi Stock Exchange firms over the timeframe 2017 to 2019. The paper applies both a manual content and regression analysis approach. The results show that firm performance deteriorates with board size and independence, audit committee and meeting frequency, and the presence of CEO role duality, while performance improves with board meeting frequency and ownership concentration. Thus, Saudi firms should respond by maintaining smaller boards and more frequent meetings, keeping the Chair and CEO roles separate, and maintaining smaller audit committees with more focused meetings. Further, the appointment of independent directors only makes a meaningful contribution to firm performance where they are truly independent. Finally, more concentrated ownership tends to encourage better firm performance due to the regime of monitoring and discipline concomitant with more powerful shareholders. The implications of this paper are threefold. First, the implementation by Saudi Arabia of the latest corporate governance regulations and IFRS adoption almost certainly impact firm performance markedly. Second, corporate governance regulations should recognize the role of more frequent board meetings and more concentrated ownership in enhancing corporate performance. Third, stakeholders should apply pressure on investee firms to maintain smaller boards, engage genuinely independent directors, separate the role of Chairman and CEO, and maintain smaller audit committees with fewer and more effective meetings. The results should help corporate boards when deciding on the best corporate governance mechanisms to enhance firm performance. Further, the study should provide policy makers with a better understanding of the corporate governance structures required to promote better performance by drawing on existing theories and the empirical modelling, in an emerging economy setting such as Saudi Arabia, a new and broader data set, thereby informing better future policy and protecting shareholders’ interests.

Firms' rationales for CEO duality: Evidence from a mandatory disclosure regulation

Exploiting the 2009 amendments to Regulation SK, we provide unique evidence on the first-time disclosure of the reasons firms state for combining or separating the roles of CEO and chairman. The stated reasons support both agency theory and organization theory. They are more numerous, comprise more words, and have a more positive tone for firms with duality. Examining the announcement returns to firms' disclosures, we find that investors evaluate the most frequently cited reasons for CEO duality by considering firm's characteristics. Our evidence enhances the understanding of firms' endogenous decision to opt for CEO duality and its value consequences.

Do Board Characteristics Affect Bank Performance? Evidence from the Eurozone

This study analyzed the effect of board structure characteristics on bank performance. Over a sample of 50 banks in five Eurozone countries, including the UK, Germany, France, Italy, and Spain, during the period 2000–2019, our empirical evidence has suggested that most board characteristics increase bank performance, while the separation of the roles of CEO and chairman inhibits it. By using fixed effects and random effects regressions, as well as a pooled OLS panel data estimation, we have found that a board size of between 7 and 10 has a significant impact on bank performance. In addition to board size, we have also found that board independence has a positive and significant impact on bank performance. Furthermore, results have shown that the number of board meetings and financial experts plays an important role on bank performance. In contrast, there is no considerable increase in bank performance when the role of CEO and chairman is separated.