Frequency Of Board Meetings Research Articles

The Effect of Corporate Governance Mechanisms on Firms’ Financial Performance: Evidence from Selected Commercial Banks in Ethiopia

Corporate governance has become subject to the development agenda of most developed and developing countries economy, due to the fact that corporate governance structure of a firm has critical impact on its financial performance. Corporate governance mechanisms emerge to tackle agency problems in ensuring that shareholders’ funds are not expropriated or wasted on unprofitable activities. The results of most research studies reveal that, well governed firms have been noted to have higher firm performance than poor governed firms. However, there are different researchers who opposed this idea as they have found mixed results on the relationships between different variables of corporate governance and financial performance. Research studies on this issue in developing countries; especially in Ethiopia remained an ignored area from empirical research. Thus, this study examined the effect of corporate governance mechanisms on firms’ financial performance on the selected commercial banks in Ethiopia by taking a sample of 6 commercial banks starting from the year 2003 up to 2009. This study used return on asset, return on equity and operating profit margin as dependent variables to measure financial performance of commercial banks and board size, board independence, frequency of board meetings, chief executive officer duality, audit committee and board ownership as independent variables to express quantitatively corporate governance mechanisms. In addition, firm size, financial leverage and firm growth rate were used as control variables, which are specific to commercial banks and general to the economy as a whole. The researcher used both correlation analysis and pooled panel data regression models of cross-sectional and time series data for analysis. The results provide evidence that board size is negatively and significantly related with all the three indicators of financial performance- return on asset return on equity and operating profit margin. Audit committee and financial performance indicators-return on asset and return on equity is negative and statistically significant, but it is not significant with operating profit margin. Board independence, chief executive officer duality and board ownership are positively and significantly related with all the three financial performance indicators. However, frequency of board meetings is not statistically significant with all the three financial performance indicators. Keywords: Corporate Governance Mechanisms, Agency Problem, Firms’ Financial Performance and Commercial Banks. DOI : 10.7176/RJFA/10-19-03 Publication date :October 31 st 2019

The Effects of Characteristics of the Board of Commissioners and Audit Committee on the Level of Risk Disclosure in Financial Sector Service Companies in the Banking Sector Listed on the Indonesia Stock Exchange in the Period 2015-2017

The aim of this study is to examine the effects of the board of commissioners and audit committee characteristics such as the proportion of independent commissioners, the board of commissioner size, frequency of board meetings, audit committee size, the proportion of independent audit committee and frequency of audit committee meetings on the level of risk disclosures. The results show that the frequency of board meetings, the proportion of independent audit committee and frequency of audit committee meetings significantly affect the level of risk disclosures, while the proportion of independent commissioners, the board of commissioner size, and audit committee size do not significantly affect the level of risk disclosures. The results show that the proportion of independent commissioners, the board of commissioner size, frequency of board meetings, audit committee size, the proportion of independent audit committee and frequency of audit committee meetings simultaneously have significant effects on the level of risk disclosures. The results of the study provide investors the information regarding the risk that companies could have, and they are also useful as a basis for making decisions

Board Meeting Attendance and Corporate Tax Avoidance: Evidence from the UK

Is corporate tax avoidance associated with board meetings and attendance? Despite the large amount of research in management and finance on the impact of boards in several firm decisions, there is very little research that associates boards with tax avoidance. In this article, we look at firms listed on the London Stock Exchange during the period 2002–2015 and analyze whether a higher frequency of board meetings in the UK is associated with lower corporate tax liability. Our findings show that board meetings and attendance rate exert opposite effects, although the frequency of meetings is associated with lowering the tax liability. However, the association does not hold in a linear way. Tax-avoiding firms pay about 3 percent less effective tax rate, which is associated with average levels of meetings frequency, whereas those in the upper tail of the effective tax rate distribution benefit from a combined decrease of about 5–6 percent in the effective tax rate. The results conclusively support the view that a more resilient and focused control of board members mitigates opportunistic behavior and rent-seeking, thus enabling managers to engage in tax avoidance strategies.

Board composition and corporate reporting on internet: Indian evidence

PurposeThe purpose of this paper is to investigate the impact of board composition on the level of corporate internet reporting (CIR) practices.Design/methodology/approachThis study uses content analysis to examine the CIR practices of 140 Indian companies selected from the Bombay Stock Exchange 200 index for the year 2015. CIR was measured on a comprehensive internet disclosure index of 136 items capturing both content and presentation dimensions. Regression analysis was used to explore the impact of board composition (board size, board independence, frequency of board meetings, CEO duality and family members on the board) and audit committee characteristics on CIR while controlling the impact of variables firm size, leverage, profitability and industry type.FindingsThe findings reveal that larger boards, boards with less family members and audit committees that meet more frequently are more likely to engage in CIR practices. In addition, larger firms and firms that make less use of debt tend to disclose more information on their websites.Research limitations/implicationsThe focus of the study has been on one aspect of corporate governance mechanisms i.e. board characteristics. Future studies can explore the impact of ownership structure on CIR practices.Originality/valueThis study extends the prior CIR research by demonstrating the effectiveness of corporate governance mechanisms in particular board characteristics in adopting internet reporting practices for Indian companies. The examination of the relationship between corporate reporting on the internet and corporate governance aids regulators in evaluating and enhancing the effectiveness of the boards.

Frekuensi Pertemuan Dewan Komisaris dan Komite Audit Terhadap Manajemen Laba Dengan Pendekatan Non-Discreationary Accruals

This research aim to obtain empirical evidence about the practice of earnings management in use of corporate governance mechanism which consists of the frequency of board and audit committees meeting. This study uses measurements of earnings management with the non-discreationary accruals (NDA) approach introduced by Jones. The population of this study is sub-sectors companies in the construction and building in 2010-2016. The sampling technique uses a purposive method. The method of data analysis uses multiple regression analysis, the classical assumption test previously and followed by hypothesis testing. The results of this research indicate that the frequency of board meetings does not significantly influence on the earnings management, while the frequency of audit committee meetings has a negative effect on the earnings management.

Impact of corporate governance characteristics on intellectual capital performance of firms in India

This study examines the corporate governance characteristics and its influence on the intellectual capital (IC) performance for a sample of 95 firms listed on National Stock Exchange in India. The corporate governance (CG) characteristics are represented through board size, independence of directors, frequency of board meetings, remuneration of directors and composition of board. The impact of these CG characteristics on the performance of intellectual capital and its components is studied for a 7-year period, i.e. FY2010–2011 to FY2016–2017, using panel regression. The research findings provide clear evidence that CG characteristics influence the IC performance of only large-cap firms in India. Further, board size and independence of directors are seen to have the most significant impacts. Board size is negatively associated with IC performance of large-cap firms. Capital expended efficiency and productivity of midcap firms are observed to have a significant inverted-U relation with board size. The relative significance of various other CG factors varies for IC as well as its sub-components. The findings of this study are important because it gives a strong empirical evidence for regulatory authorities in India to strictly monitor the compliance of rules on structure and composition of the board of directors besides just laying down broad guidelines for the listed companies. This also serves as the first research work to justify the significance of corporate governance on IC performance of firms in India. One of the limitations of this research is inability to incorporate several other characteristics of board such as duality and detailed profile of board members due to non-availability of time-series data for all the firms.

Corporate Governance, International Diversification and Organizational Performance: A Study on Malaysian Property Industry

Currently, the housing sector is one of the Malaysian government’s main concerns as it is continuously facing various problems. This sector is endlessly struggling with enormous difficulties that have caused negative implications to the industry’s performance. Since a well governed corporate governance is said to be associated with better company performance, a number of corporate governance mechanisms are being employed in this study so as to test on their impact on the firms’ performance. Independence of board of directors (BOD) and audit committee (AC) members, non-duality and frequency of board meetings held per annum are among the CG mechanisms tested in relation to the firms’ performance, Tobin’s Q. The three-year period (2013-2015) data is taken from the annual reports and Thomson Reuters Data stream for all the companies in the property industry in Bursa Malaysia. Number of board meetings, CEO/Chairman non-duality, Independence of BOD members. These empirical evidences from this study would enhance the importance of incorporating corporate governance mechanisms and international diversification in relation to organizational performance for property industry.

Corporate Governance and Efficiency of Rural and Community Banks (RCBs) in Ghana

Corporate governance crises that occur in the banking sector normally cripple economies and bring many hardships to individuals, corporate entities, communities, and the nation at large. In this study, we sought to examine the level of technical efficiency and productivity growth of rural and community banks (RCBs) and the impact of corporate governance indicators on the RCBs' efficiency performance in Ghana. A sample of 70 out of 140 RCBs was selected based on the ARB Apex Bank's performance ratings and data availability. Data envelopment analysis (DEA) was used to determine the technical efficiency scores of the selected RCBs. In the second stage of the analysis, these computed efficiency scores were regressed on the corporate governance variables to assess the effects of the latter. The findings from the DEA approach show that 11% to 20% of the sampled RCBs in Ghana operate close to the efficiency frontier, whereas the majority - about 65% to 81% - underperformed within the study period of 2007 to 2013. The study further established that the number of board members, frequency of board meetings, and corporate social responsibility have significant influence on RCB efficiency.

Board meeting frequency and firm performance: examining the nexus in Nigerian deposit money banks

The main aim of this study is to examine the impact of board meeting frequency on firm performance of deposit money banks in Nigeria. Data used for the study were spawned from annual reports of the deposit money banks listed on Nigeria stock exchange (NSE) market. We employed a panel regression to test the significant association amid variables. Our main empirical result shows a positive association amid board meeting frequency and firm performance. Although, our findings also show that board size was positive and not significant and firm size was negative and significant. The study recommended that management of banks should consider increasing their frequency of board meetings to at least four (4) meetings per year. This will allow the sampled deposit money banks to comply with the good governance code in Nigeria which states that companies must meet at least once per quarter.

Management accounting practices, governing boards and competitive advantage of Ugandan secondary schools

PurposeThe purpose of this paper is to report on the results of a study carried out to determine the use of Management Accounting Practices (MAPR) in Ugandan secondary schools. The study also sought to determine whether MAPR and governing boards (board size, gender diversity and frequency of board meetings) influence the perceived competitive advantage.Design/methodology/approachThis study is cross-sectional and correlational. Data were collected through a questionnaire survey of 200 secondary schools. The data were analysed through ordinary least squares regression using Statistical Package for Social Scientists.FindingsThere are wide variations in MAP in terms of the extent to which the schools employ management accounting techniques. Also, MAP and governing boards have a predictive force on the schools’ competitive advantage. However, governing board’s size has no effect on competitive advantage. In terms of the control variables, the results suggest that while government school ownership has a positive effect on competitive advantage, the school’s size has no effect. There are intertwining relationships of frequency of board meetings, board size and school size.Research limitations/implicationsThe present study was limited to the secondary schools in Uganda which limits generalisability. Still, the results offer important implications for secondary schools’ governing boards, owners and for similar African governments who are a major stakeholder in the secondary school education system. The exact mechanism by which intertwining relationships of frequency of board meetings, board size and school size impact competitive advantage is not been explored in this paper. Future researchers may direct research effort in this endeavour.Originality/valueTo the authors’ knowledge, this is the first study to investigate use of MAPR in secondary schools and to provide evidence of their efficacy.

Understanding the board of Swedish farmer cooperatives – Cases focusing on board composition and interaction patterns

Abstract This study gathered and examined empirical evidence concerning the extent to which the performance of cooperatives is related to board composition and interaction patterns – more specifically board size, number of external directors, director tenure and attitudes, frequency of board meetings, education of directors, and degree of consensus between the board and the chief executive officer (CEO). Theories of corporate governance provided propositions that were used as a starting-point for interviews held with board chairmen in thirteen Swedish agricultural cooperatives. The results show that cooperatives benefit from larger boards than suggested by most governance literature. External directors do not improve the overall performance, but having well-educated directors and CEOs who recognize the specificities of cooperative governance are crucial.

Analysis of Governance and Efficiency on Zakat Distribution: Evidence From Indonesia

This study analysesand identifies the governance factor(s) that influence zakat disbursement efficiency for Indonesia’s National Zakat Board (BAZNAS)in four district of Central Java Province, namely Banyumas, Purbalingga, Banjarnegara, and Kebumen. This research examines how the zakat institution in Indonesia has improved in terms of disbursement activities over the past 5 years (2011-2015).This is a quantitative research study that uses two approaches of efficiency analysis, namely (i) zakat disbursement efficiency measurement (ratio analysis) and (ii) identification of governance factor(s) that influence the zakat disbursement efficiency of the zakat institutions (regression analysis). Eviews 9 was used in data calculation. In the first approach, there are three efficiency measures: disbursement efficiency, cost efficiency and time efficiency. In the second approach, governance factors (board size; professionals on board; and frequency of board meetings) identify the influence of governance factors on zakat disbursement efficiency measures. The findings showthat there is a negative influence between board size and cost efficiency and no influence with disbursement and time efficiency. However, the relationshipbetween board size and disbursement and time efficiency is rejected because of insignificant results. Professionals on boards has a positive influence on disbursement, cost and time efficiency. Lastly, the frequency of board meetings positively influences disbursement efficiency and time efficiency. Frequency of board meetings showed a negative influence with cost efficiency. This research is significant as it could contribute to future discussions on the potential ways to improve zakat governance and efficiency in Indonesia. The outcomes from the discussions will be useful as a guide for policymakers looking to improve the zakat institution’s governance system.
 
 Keywords:Efficiency, Governance, Indonesia, Zakat

Meta-analysis of corporate governance in Asia

Research on corporate governance has been conducted extensively over the past few decades. However, the result of various studies failed to produce conclusive insight. This study is aimed at identifying, classifying, analyzing and interpreting previous research on corporate governance in Asia by using meta-analytical approach. By using the HOMA (Hedges-Olkin Meta-Analytical) procedures, the current study collected eighty articles from journals ranging from 1999 until 2017. Data were gathered from empirical scientific papers. Through rigorous research process, the current study found that most previous research on corporate governance in Asia observed the patterns of influence of various types of ownership structure and board characteristics on corporate performance. Ownership by family, government, and management tend to have a negative impact on performance, whilst institutional ownership and foreign ownership show positive effect on performance. The study reveals inconsistent result for frequency of board meetings, existence of family members on board, outside director, and board independence towards performance. Similar finding appeared for the relationship of performance to women on board and CEO duality. CGPI as the Corporate Governance Perception index and board size were found to have a positive consistency on performance. Apart from limitations of the study, the result suggests that there exists institutional and environmental specificity in the study of corporate governance in Asia that may be different from other context of study so that future researcher need to take a precaution of this matter.

Corporate boards, ownership structures and corporate disclosures

PurposeThe purpose of this paper is to investigate the effect of corporate board attributes, ownership structure and firm-level characteristics on both corporate mandatory and voluntary disclosure behaviour.Design/methodology/approachMultivariate regression techniques are used to estimate the effect of corporate board and ownership structures on mandatory and voluntary disclosures of a sample of Libyan listed and non-listed firms between 2006 and 2010.FindingsFirst, the authors find that board size, board composition, the frequency of board meetings and the presence of an audit committee have an impact on the level of corporate disclosure. Second, results indicate that ownership structures have a non-linear effect on the level of corporate disclosure. Finally, the authors document that firm age, liquidity, listing status, industry type and auditor type are positively associated with the level of corporate disclosure.Research limitations/implicationsFuture research could investigate disclosure practices using other channels of corporate disclosure media, such as corporate websites. Useful insights may be offered also by future studies by conducting in-depth interviews with corporate managers, directors and owners regarding these issues.Practical implicationsThe evidence relating to the important role that corporate governance mechanisms play in shaping the expectations relating to the level of corporate voluntary and/or mandatory disclosures may be useful in informing investor decisions, as well as future policy and regulatory initiatives.Originality/valueThis paper contributes to the existing literature by examining the governance-disclosure nexus relating to both mandatory and voluntary disclosures in both listed and non-listed firms operating in a developing country setting.

The Effect of Board Independence and Board Meeting on Firm Performance: Evidence from Jordan

The purpose of this study to examine the relationship between the internal corporate governance mechanism related to the board of directors’ characteristics namely (board independence and frequency of board meetings) and firm performance in Jordanian listed firms. The study used Cross-sectional data for the year 2013, with a sample of 64 industrial firms listed in the Amman Stock Exchange. Firm performance was measured by return on assets (ROA) as an accounting-based performance measure. The current study utilized multiple linear regression analysis to test the hypotheses and examine the relationship between the board of directors’ characteristics namely (board independence and frequency of board meetings) and firm performance. The findings showed that board independence is significantly and positively related to ROA. The current study found an insignificant relationship between the frequency of board meetings and firm performance measured by ROA. These results indicate that the monitoring role of the more independent board could have a significant influence on firm performance. Contradictory to expectation, the result of this study reveals that the frequency of board meetings do not determine the performance of industrial Jordanian firms. Further, Current study findings provide the idea to future researchers for further empirically explore the importance of the board of director's characteristics in Jordan. This study provides several important implications for the theory, regulatory authorities and policy makers and academia and researchers.

Frequency of Board Meetings and R&D Investment Strategy: Evidence from OECD Countries

This study seeks to examine the impact of frequency of board meetings on R&D investment strategy in OECD countries. The study uses a panel data of 200 companies from Anglo American and European countries between 2010 and 2014. The ordinary least square regression is used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use fixed effect regression, two-stage least squares using instrumental variables. The results show that there is a negative and significant relationship between frequency of board meetings and R&D investment strategy, with a greater significance among Anglo American countries than among Continental European countries. The rationale for this is that the legal and accounting systems in the Anglo American countries have greater protection through greater emphasis on compliance and disclosure and therefore allowing for less risk-taking. Future research could investigate R&D investment strategy using different arrangement, conducting face-to-face meetings with firm’s directors and shareholders. This study extends, as well as contributes to the extant CG literature by offering new evidence on the effect of frequency of board meetings on R&D investment strategy between two different traditions. The findings will help regulators and policy makers in the OECD countries in evaluating the adequacy of the current CG reforms to prevent management misconduct and scandals.

Corporate governance quality, firm size and earnings management: empirical study in Indonesia Stock Exchange

Earnings management (EM) is manipulation done by management in preparing financial statement in order to gain management advantages or to increase the firm value. EM can reduce the quality of financial statements because it does not show the real earning periodical. This research aims to identify the effect of good corporate governance (GCG) (institutional ownership, managerial ownership, frequency of board meetings, frequency of audit committee (AC) meetings), firm size, and leverage on the EM. Population comprises the companies in LQ 45 index of Iindonesia Stock Exchange (IDX) for the period 2010–2014. Samples of the research were taken using purposive sampling method, and the variables are tested using multiple linear regression analysis. The results of the research show that partially, only leverage has significant effect on EM, while institutional ownership, managerial ownership, frequency of board meeting, frequency of AC meetings, and firm size have no significant effect on EM, but all of the variables have simultaneously significant effect on EM. Limitations of the research are the only used 6 independent variables and 21 companies as samples of the research.

The Impact of Corporate Governance on Financial Performance: The Case of Listed Companies in the Consumer Services Sector in Botswana

The concept of corporate governance relates to the procedures and practices that are implemented to run a company in such a way that its objectives are achieved. It is the mechanism and process to control and direct a business enterprise, which would result in appropriate balancing of the varied interests of the stakeholders and that of the organization. This study focused on the effect of corporate governance of listed companies in the consumer services sector in Botswana for the period 2012-2016. Financial statements of the listed consumer services companies were used as the main source of data. Return on Assets was taken as the dependent variable to measure profitability and Board size, gender diversity, male-female representation in the board, composition of executive and non-executive directorship, number of sub-committees and frequency of board meetings as independent variables. The findings indicated significant positive relationships between board size and the number of male board members and between board size and the number of non-executive directors; significant positive relationships between the number of non-executive members and the number of male board members and with the number of sub-committees; between female board representation and gender diversity and between the number of board sub-committee and the frequency of board meetings. Negative significant relationships were identified between male board representation and female board representation and between the number of executives and gender diversity. Return on assets, which measured the performance of the selected companies showed a strong negative relationship with number of sub-committees. Further analysis also revealed a significant impact of the number of subcommittees on the financial performance of the listed companies in the consumer services sector. None of the other independent variables showed any significant impact on the profitability of the selected firms. The study will be useful to the stakeholders to appreciate various dimensions of corporate governance and their influence in the financial performance of business enterprises.

Corporate governance and dividend pay-out policy in UK listed SMEs

PurposeThe purpose of this paper is to examine the extent to which corporate board characteristics influence the level of dividend pay-out ratio using a sample of UK small- and medium-sized enterprises from 2010 to 2013 listed on the Alternative Investment Market.Design/methodology/approachThe data are analysed by employing multivariate regression techniques, including estimating fixed effects, lagged effects and two-stage least squares regressions.FindingsThe results show that board size, the frequency of board meetings, board gender diversity and audit committee size have a significant relationship with the level of dividend pay-out. Audit committee size and board size have a positive association with the level of dividend pay-out, whilst the frequency of board meetings and board gender diversity have a significant negative relationship with the level of dividend pay-out. By contrast, the findings suggest that board independence and CEO role duality do not have any significant effect on the level of dividend pay-out.Originality/valueThis is one of the first attempts at examining the relationship between corporate governance and dividend policy in the UK’s Alternative Investment Market, with the analysis distinctively informed by agency theoretical insights drawn from the outcome and substitution hypotheses.

Corporate governance and corporate social disclosures: a meta-analytical review

PurposeThis study aims to investigate the association between corporate governance and corporate social disclosures (CSD).Design/methodology/approachData analysis has been conducted on 29 prior studies published between 2004 and 2016 for the purpose of integrating the findings across studies. The study uses the meta-analysis instrument developed by Hunter et al. (1982).FindingsThe investigation finds a significant positive association between board size, the frequency of board meetings and auditors’ credibility with CSD. Both the managerial and concentrated ownership have a significant but negative association with CSD. In contrast, board independence, board gender diversity, the composition of non-executive directors, government ownership, foreign ownership and institutional ownership are insignificantly and positively associated with CSD. CEO duality is also insignificant with CSD but indicates a negative association. The study further investigates that the association between board gender diversity and CSD affected by the differences of the country of study.Originality/valueThis paper adds significance to the extant academic literature as well as assists the appropriate policy maker in assessing the determinants of CSD from the viewpoints of corporate governance. It further aims to reconcile the findings of the previous studies around the world, and also for the developed and developing countries separately.