Corporate Board Characteristics Research Articles

Corporate Board Characteristics of Family-Managed Firms and it’s Impact on Firm Performance

Well-balanced and active corporate boards ensure effective corporate governance in family firms. Studies in the area of corporate governance across the globe made considerable effort to study the composition of corporate boards and their effectiveness. The present study is an effort to evaluate the impact of board characteristics on the performance of selected Indian family-managed firms. The paper encompasses how various board parameters such as board size, board independence, the duality of the chairman, gender diversity, and inclusion of foreign directors in the board impact a firm's market and accounting performance measures. The data is collected from the CMIE PROWESS Database, consisting of 173 family-managed firms belonging to 11 macro-industrial sectors selected. The panel data used for the study consist of 2076 observations for 12 years, from 2010-11 to 2021-22. The study uses regression analysis to evaluate the impact of board characteristics on performance measure indicators Tobin’s Q and ROA of the firms.

The Influence of Business Ethics and Diversity on ESG Disclosure: Empirical Evidence from Indonesian Firms

This study examines the impact of corporate governance mechanisms, board characteristics, and ethical leadership on Environmental, Social, and Governance (ESG) performance in Indonesian companies. The analysis investigates how board ethics, independence, tenure, ownership structure, and other governance factors influence ESG scores. The findings reveal that board ethics and independence significantly improve ESG performance, supporting the role of ethical leadership and resource dependence theory in shaping corporate sustainability. Additionally, the study highlights the role of institutional ownership in driving ESG outcomes, particularly in emerging markets. Cultural factors, such as board culture, also contribute to the variability in ESG performance, suggesting the importance of aligning corporate governance practices with local values and global sustainability standards. The results have important theoretical implications, extending corporate governance theories to the context of developing economies. Practically, the findings provide insights for policymakers, corporate leaders, and investors to enhance ESG performance through effective governance reforms and ethical leadership. This study offers a significant contribution to the growing literature on ESG in emerging markets and provides a foundation for future research on corporate sustainability in different institutional settings.

INFORMATION ASSET PROTECTION IN ACCOUNTING: ANALYZING CORPORATE GOVERNANCE AND RISK MANAGEMENT THROUGH A BIBLIOMETRIC LENS

This paper deals with the protection of information assets related to accounting, based on bibliometric analysis involving 333 articles from the Web of Science. The five clusters that had been targeted by this research included: Corporate Governance and Board Characteristics (Cluster 1); Financial and Performance Metrics (Cluster 2); Accounting Standards and Reporting (Cluster 3); Risk Management and Disclosure (Cluster 4); Information Quality and Investor Protection (Cluster 5). It aims to define the current boundaries of the literature, identify main tendencies, and give a view on the future course of research. Bibliometric and content analysis methods were applied in the study to certain articles, and the relevance and impact were identified by the data obtained in the period between the years 2007–2024. Consequently, this chapter presents a broad-based analysis of how corporate governance ensures and drives information protection, the presentation of financial metrics internally within the organization, the importance of accounting standards, and the effectiveness of risk management and disclosure practices. The findings shall add to the better understanding of researchers, practitioners, and policy-makers in developing the protection of information assets in the accounting area.

The influence of the board’s size, independence and sociodemography on the firm’s climate change orientation: evidence from the GALPLACC index

PurposeThis paper aims to explore the relationship between board composition and a firm’s commitment to combatting climate change. Specifically, this study investigates how various characteristics of the board, namely its size and presence of independent directors, and of the directors themselves, including gender diversity, age, educational background and national homogeneity, affect the corporate-level climate change orientation. From a theoretical standpoint, the authors take a cross-fertilizing perspective, bridging upper echelons theory with agency, resource dependence and critical mass theories.Design/methodology/approachThe study uses ordered probit regression models on a hand-collected multi-country and multi-industry sample of 35 listed firms included in the Global Climate Change Liquid Equity Index (GALPLACC) provided by ECPI. This index is particularly relevant as it focuses on firms that have demonstrated a commitment to climate change, providing a robust dataset for the analysis.FindingsThe findings underscore the importance of disentangling various characteristics of corporate boards and directors. Specifically, the orientation toward climate change is negatively influenced by both board size and having a higher number of independent directors, while it is positively affected by reaching a critical mass of women on the board. Conversely, factors such as average age, educational background and the level of national homogeneity do not show significant effects.Originality/valueThis paper has an exploratory nature and contributes to the ongoing debate on the crucial, yet controversial role played by board-level and directors’ sociodemographic characteristics in shaping a firm’s environmental stance. Moreover, this study offers potential recommendations for policymakers regarding board composition to enhance firms’ climate change orientation.

Corporate board characteristics and CSR budget of selected Bangladeshi banks: moderating role of corporate reputation

Corporate board characteristics and CSR budget of selected Bangladeshi banks: moderating role of corporate reputation

Board demographic characteristics and governance practices of SOEs in Ghana

Across the globe and particularly in the developing country settings, there has been an upsurge of interests from businesses, academics and policy-makers alike in understanding the relationship between corporate board characteristics and governance practices of State-Owned Enterprises (SOEs). This understanding especially in post-pandemic era would aid in formulating best policies for optimal performance of the SOEs. The aim of this study was to investigate the influence of board characteristics on corporate governance practices in SOEs in Ghana. Utilizing a structured questionnaire, data was collected from employees across various SOEs and analysed through Smart-PLS structural equation modelling. The findings indicate that board demographic characteristics have a significantly positive impact on governance practices, underscoring the importance of diversity in board composition. This outcome highlights the need for SOE policymakers to prioritize board diversity to enhance governance efficacy. This research enriches the literature on corporate governance in the developing country context and has practical implications for enhancing SOE management and performance. It also provides a foundation for future research to explore the dynamics of board characteristics in different contexts.

Corruption prevention practices and tax avoidance: The moderating effect of corporate board characteristics

This paper examines the impact of corruption prevention practices on tax avoidance from a neo-institutional theoretical perspective. Our study also contributes to the existing corruption and tax literature by considering the moderating effect of corporate board characteristics on the association between corruption prevention practices and tax avoidance. Based on a sample of FTSE 350 United Kingdom (UK) listed firms, our findings illustrate that a firm’s commitment to good anti-corruption practices is linked with lower tax avoidance. Furthermore, corporate board characteristics complement anti-corruption practices in minimizing corporate tax avoidance. Our findings provide useful evidence to governments, regulators, and other stakeholders who aim to determine best business practices that could help in reducing the risk of corporate tax avoidance. In general, our findings are robust to alternative measures of tax avoidance and different types of multivariate regression methods, namely ordinary least squares, two-stage least squares and Tobit regression techniques.

Corporate Board Characteristics and Performance of Non-Financial Firms in Nigeria

This study investigates if there is any relationship between certain corporate board characteristics and financial performance of non-financial listed firms in Nigeria. It uses secondarily sourced panel data over the period from 2005 to 2020 of 76 such firms listed on the floor of the Nigerian Exchange Group (NXG). The generalized method of moments (GMM) results reveal that while board size(BS), board compensation(BC), board meetings(BM) and board members with military experience(BME) are positively significant with performance; board independence(BI), board gender diversity(BGD), board national diversity(BND), board tribal diversity(BTD), board busyness(BB), board members’ education level(BE) and board foreign directors(BFD) are negatively significant with performance but board shareholding or ownership(BSH) is insignificant. All the control variables (leverage, market–to-book ratio, firm size, year fixed effect dummy as well as the industry sector fixed effect dummy) are statistically significant. This study concludes with some recommendations.

The impact of corporate social responsibility disclosure and board characteristics on firm performance: evidence from Vietnam-listed firms

The impact of corporate social responsibility disclosure and board characteristics on firm performance: evidence from Vietnam-listed firms

Corporate social responsibility, board characteristics, and family business in Thailand

AbstractExploring the relationship between corporate social responsibility (CSR) strategy, family business, and board characteristics in Thailand provides invaluable insights into how boards of family businesses integrate CSR considerations, leading to responsible business practices and sustainable development in Thailand. Relying on the top 100 listed firms in the Stock Exchange of Thailand and the Refinitiv's CSR strategy score, we find that family business firms or firms with CEO serving as the chairman of board engage less CSR strategy, being consistent with the agency cost hypothesis and the expropriation view of family businesses. Additionally, in line with the resource dependency theory, female directors, independent directors, board tenure, and board size positively influence a firm's CSR. Additional analyses including the Heckman's sample selection bias and 2SLS instrumental variable approaches show that our results are robust and are not driven by unobserved heterogeneity. More importantly, gender diversity is an exemplary governance mechanism as it is the only board characteristic with a positive effect on CSR in both family and non‐family sub‐samples. While board tenure is positively associated with CSR in the non‐family business sample, larger board size and more board independence in the family business positively influence a firm's CSR. Findings from the family business sample support the functional view of board and socioemotional wealth of family firms.

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.

Impact of Corporate Board Characteristics on Financial Firms' Reputation: A Cross-Sectional Study

A firm's reputation is a critical intangible asset that affects its competitive advantage, stakeholder trust, and long-term sustainability. The contents and attributes of a company's "board of directors” are very important, especially in shaping its reputation in the financial industry. As the governing body responsible for strategic decision-making and oversight, the corporate board shows a significant exertion on shaping the firm's operations, policies, and its reputation. The expertise and qualifications of board members, particularly in financial matters, instill confidence in stakeholders, demonstrating the firm's commitment to sound governance and risk management. This paper explores the association between "corporate board characteristics” and the reputation of "financial firms". The findings of this study can help with further research and guide policymakers, executives, and stakeholders in their efforts to enhance financial firms' reputations through effective board governance. The study survey was conducted among 190 people working in the financial sector to know the role and impact of Corporate Board Characteristics on Financial Firms' Reputation. The study concludes that there is significant impact of Corporate Board Characteristics on Financial Firms' Reputation. &nbsp

Board Characteristics and Financial Performance of DMBs: Evidence from Nigeria

The study examines the effect of corporate board characteristics on the performance of listed DMBs in Nigeria. This study used secondary data extracted from the annual reports of 12 listed firms in Nigeria during the period 2011 – 2020. The study employed Tobin’s Q as a proxy of firm performance, while Board size, Independence, diligence, gender diversity, and ethnic diversity are employed as the proxies of board characteristics. The Pooled Ordinary Least Square regression (POLS) and panel fixed effect regression methods were used to analyse the data collected. Findings revealed that board size and board ethnic diversity exerts a statistically significant negative influence on DMBs' financial performance, board independence has a negative and non-significant effect on DMBs financial performance, while board diligence and gender diversity have a positive non-significant effect on DMBs' financial performance. The study recommends among others that board size be carefully analysed by shareholders and balanced according to the expected result, board independence be continuously maintained and periodically reviewed, a maximum of 6 board meetings excluding emergency meetings be held annually; board members should consist of at least half gender diversity, and finally, ethnic heterogeneity be allowed on the boards of Nigerian firms for equity, fair representation, and relative peace

Does board structure drive Sustainable Development Goals disclosure? Evidence from an emerging market

The study investigates to which extent corporate board characteristics influence the disclosure of Sustainable Development Goals (SDGs) in Omani-listed financial institutions. Using hand-collected data for 34 Omani financial institutions listed on the Muscat Stock Exchange for the period between 2016 and 2020, the study applies multivariate analysis to examine the association between corporate board characteristics and SDGs disclosure following Al Lawati and Hussainey’s (2022) method in measuring SDG variables. Drawing from agency theory and resource dependence theory, our results showed that the independence and financial expertise of the corporate board promote better disclosure of SDGs. On the other hand, gender and nationality diversity of the board were found to be negatively associated with the disclosure of the SDGs. Our paper contributes to the growing literature by being the first study to examine the extent to which corporate board characteristics drive SDGs disclosure in one of the emerging markets. In addition, in our study, we employ the resource dependence theory with the agency theory to investigate our research hypotheses in order to capture the full practice of the SDGs disclosure. The study implies that the characteristics of the corporate board are one of the main determinants of SDGs disclosure in emerging markets. Furthermore, not all boards behave the same with regard to the disclosure of the SDGs, and this behavior is determined by its characteristics. The study recommends that a sustainability committee may be initiated to enhance the disclosure of the SDGs in Omani financial institutions.

Analysis of the relationship between corporate board characteristics and corporate performance

Analysis of the relationship between corporate board characteristics and corporate performance

Unveiling the alliance between corporate board composition and earnings management through meta-analysis

Misconduct in the financial sector, such as earnings management, has garnered significant attention from researchers due to the peculiarities of managers in financial reporting. Effective corporate boards have the potential to limit managerial opportunism in this regard. However, the existing literature yielded inconclusive results. Therefore, the present study aims to examine the influence of corporate board characteristics on earnings management through meta-analysis. The dataset comprises 72 published empirical studies with 3,66,417 firm-year observations. A two-step methodology is adopted following the PRISMA guidelines proposed by Moher et al. (2009) and the meta-analytic technique propounded by Hedges and Olkin (2014). The major findings of the study uncover that active, gender-diverse and larger corporate boards are most influential in controlling earnings management practices. Furthermore, different discretionary accrual measures, corporate governance systems, and the International Financial Reporting Standards (IFRS) adoption moderate the association between earnings management and board composition. The study provides a quantitative generalization to the inconclusive outcomes of published empirical studies from different timeframes and jurisdictions. The findings may help academicians and researchers to develop a holistic understanding of the impact of corporate boards on earnings management. This is one of the first studies to undertake a meta-analytic review of the association of board gender diversity and board activity as board characteristics with earnings management.

Corporate social responsibility assurance, board characteristics and social performance disclosure. Evidence of listed firms in India

AbstractThe study examines board characteristics, corporate social responsibility (CSR) assurance and social performance disclosure of listed firms before and after mandatory CSR reporting in India. We used the Indian stock market as the testing grounds and applied panel regression and difference‐in‐differences to analyse 960 firm‐year observations between 2010 and 2021. The first findings show that independent board directors and total board size are insignificant in CSR assurance engagement in a mandatory CSR policy period. However, CEO duality is less than likely causing CSR assurance engagement. The second findings show that CSR assurance engagement more than likely causes an increase in social performance disclosure before mandatory CSR policy implementation and increases social performance after policy implementation. The third findings show that the interactive effect of board characteristics (independent directors, total board size and CEO duality) and CSR assurance engagement causes an increase in social performance disclosure. The study sought clarity on the impact of CSR assurance and mandatory CSR reporting on information asymmetry problems to stakeholders. The study also contributes new knowledge on the influence of the interactive effect of board characteristics and CSR assurance on the social performance disclosure of listed firms in India.

Exploring the relationship between corporate governance and firm's performance: Does political connection matter?

AbstractThe purpose of this research is to investigate the influence of corporate board and audit committee characteristics on firm performance as measured by accounting‐based ratios (earnings per share, return on asset, and return on equity) as well as the market‐based measure (Tobin's Q). In addition, this research introduces political connections to examine whether it can moderate the relationship between corporate board characteristics and firm performance. The study reveals that a higher proportion of independent directors and CEO duality positively affected firm performance. However, board meetings and board financial experience have no affected firm performance. The study also shows that audit committee independence, audit committee size, and audit committee expertise are positively related to firm performance. In contrast, it finds no discernible impact of audit committee meetings on firm performance. Our findings also suggest that the beneficial influences of the corporate board, in terms of higher firm performance, are greater in firms with political connections. To the best of the researchers’ knowledge, this is almost certainly the first analysis to examine the relation between the corporate board, audit committee characteristics, and firm performance, and the moderating effect of political connection of this relationship.

The Effect of Corporate Board Characteristics on Environmental Innovation

The Effect of Corporate Board Characteristics on Environmental Innovation

Corporate Social Responsibility (CSR) Disclosure on Politically Connected-Family Firms

Research aims: This study examines the relationship between political connections and family ownership toward CSR activities disclosure.Design/Methodology/Approach: This study employed 624 Indonesian public companies on the Global Reporting Initiative (GRI) list for 2010-2018. The researchers used OLS (Ordinary Least Squares) regression by considering the fixed effect diversity of industry, year, and type of GRI to examine the relationship between political connections and family ownership on CSR disclosure.Research Findings: This study discovered that companies with political connections disclosed more CSR activities because they desired to bind themselves with the government, instruments of legacy, and social motivation. However, family firms were not found to have a significant relationship with CSR disclosure. In addition, the strong family ownership in the firm impacted the reduced strength of political connections, thereby reducing the company's CSR activities disclosure. Theoretical contribution/Originality: This study is interesting because the researchers combined the issue of the politically connected board and family firms, which are frequently found in the context of Indonesian companies. The researchers expect this study to enhance corporate board characteristics and CSR disclosure literature. Practically, the researchers expect this study could provide useful information for investors to make investment decisions. Furthermore, this study provides insight for regulators, who need a view of how political connections and family companies exist in responding to the regulations they set. Therefore, the existing regulations can be improved. Yet, this study was limited to the proxy of political connection based on local regulation of politically exposed person (PEP).