Proportion Of Independent Directors Research Articles

How far the ownership structure is relevant for CSR performance? An empirical investigation

PurposeTaking hints from the lacunas in the field of ownership structure and corporate social responsibility (CSR) performance of the firms in India, especially when the moderating effect of certain corporate governance mechanism comes into play, this study aims to attempt to fulfill the gap by exploring the ownership structure of the firm (i.e. foreign ownership, institutional ownership and government ownership) and the CSR performance of the firm, when moderated by board independence of the firm. In an additional analysis, the study explores the non-linear effect of foreign ownership structure on the CSR performance in the Indian context.Design/methodology/approachThe study incorporates a strongly balanced panel data set of 280 non-financial National Stock Exchange 500 listed firms for the study period of 2013–2019. The study uses both static and Arellano–Bond dynamic panel model under generalized method of moments (GMMs) framework to establish the relationship between the studied variables.FindingsThe study acknowledges a positive impact of the foreign investors in the CSR performance of Indian firms with a higher proportion of independent directors on the board. The study further finds a contrarian role of government ownership in Indian context among the sampled firms. The study also in its extended analysis finds a non-linear inverted U-shaped relationship between foreign ownership (FO) and the CSR performance, which shows that FO positively impacts the CSR performance until a threshold level of 34% after which the curve starts declining.Practical implicationsOne of the major implications this study provides for the corporate policymakers is that the firms with a string penchant for philanthropic activities such as CSR should be concerned with attracting more foreign investors in their shareholding. Also, a higher proportion of independent directors on the board boost the engagement of the firm in CSR works.Originality/valueThe moderating effect of board independence in the ownership structure–CSR relationship attempted by this study is a rare attempt in a developing economy, such as India, and offers a fresh dimension to the study. Also, the non-linearity relationship between FO and the CSR performance and the threshold level providing the twofold effect of the variables is an innovative research attempt, especially in regard to a developing country like India.

Does the board's on-site decision inhibit over-investment.

It is an effective expansion of the research on the Board of Directors to do the research based on different board meeting forms and their effects sampling A-share companies listed in 2007–2017, the article empirically tests the impact of the times of board meetings, the proportion of on-site board meetings on listed companies’ over-investment. Consequently and significantly, the times of board meetings is positively correlated with over-investment, while the proportion of on-site board meetings is negatively correlated with over-investment. That is, the on-site meeting for the Board decision-making will better inhibit the enterprises’ over-investment behaviors. Further research shows that when there is a controlling shareholder in the company or in a dual position, the on-site board meeting no longer has a significant inhibitory effect on over-investment. By research on the independence of the Board of Directors, it is found that when selecting on-site board decision-making, the existence of independent directors has an over-investment suppression effect, and the higher the proportion of independent directors, the more obvious the inhibitory effect is. The samples are divided into state-owned enterprises and private enterprises, the study found that when choosing on-site board meetings, state-owned enterprises have a greater inhibitory effect on over-investment than private enterprises. The findings of this study will enrich the research of the board meeting and provide a new testing method for the relevant research of the Board of Directors.

Venture Capital Time Bombs and New Ventures: Do Boards Limit the Damage?

Venture capital funds have a limited lifecycle, which requires venture capitalists (VCs) to liquidate investments and return capital by the end of the fund. VCs shift attention from growing to exiting ventures as funds age. When valuable exits appear less likely, VCs facing exit pressure may pursue low-value M&As or liquidations. This pursuit could hurt the interest of those ventures that can continuously operate. Venture boards play a crucial role in exit decisions, so it is unclear if a VC’s exit pressure has a material impact on venture exit, and if board composition can limit the impact of the VC’s exit pressure. Building on resource dependence theory, we predict and show that VCs’ exit pressure increases the likelihood of low-value M&As and liquidations. We also find that the presence of non-CEO founders and CVCs on the board exacerbates the impact of VCs’ strong exit pressure, thus increasing the likelihood of low-value M&As and liquidations, while a higher proportion of independent directors alleviates the effect of VCs’ strong exit pressure on ventures. The results suggest inviting VCs onto board solves resource dependence in the short-term but has future concerns, and board composition influences the interdependent relationship between ventures and VCs.

Indulging in the Centre Stage: CEO Narcissism and Successor Selection in Family Firms

Previous research on family business succession indicates that characteristics of the incumbents can influence successor selection. Yet, what and how the incumbents’ personality affects the process has rarely been discussed. In this study, we build on upper echelon theory and narcissistic supply logic to develop and test a model of family business succession as well as the moderating effects of the proportion of independent directors and pre-succession performance, using a dataset of 83 CEOs from family firms in the United States between 1995-2020. To solidify our finding, we use different ways to measure CEOs’ narcissism to check the robustness from the US sample. Furthermore, we explore our main findings in a cross-culture context with 124 Chinese CEO samples. We largely found support for the model in both the US and China context- a positive relationship between CEO narcissism and family member selection. We extend prior theory on family business succession by exploring the relationship between CEO narcissism and successor selection, the moderating effect of independent directors as well as pre-succession performance, and offering a greater understanding of narcissistic supply theory. In this way, our findings shed light on how the CEO’s personality can strongly influence a family firm’s succession decision, which contributes to upper echelon theory, CEO narcissism, and family succession literature.

Board independence and earnings management: influence of family business generation

PurposeThis study aims at investigating the moderating role of family business generation on the association between board independence and earnings management practices of Indian family firms.Design/methodology/approachThis study uses panel data regression models to analyze the data. Board independence is operationalized via the proportion of independent directors on board and the dual role of chief executive officer. Earnings management is operationalized through discretionary accruals, which are estimated by the performance-adjusted modified Jones model (Kothari et al., 2005). Family business generation is based on the firm’s age, where each generation is equated to a period of 25 years. The parameters of interest are estimated through the hybrid model (Allison, 2009) which controls for the unobserved cross-sectional heterogeneity across firms while estimating the coefficients for time-invariant variables.FindingsBased on a sample of 26,962 Bombay Stock Exchange–listed firm-years, spanning over 13 years from the year ending March 2007 to March 2019, the results exhibit that Indian family firms are less likely to be engaged in earnings management; board independence is ineffective in controlling the earnings management practices of firms, and this relation is found to be more pronounced among family firms; first-generation family firms are more likely to be engaged in earnings management than second- or third-generation firms; and board independence has a weaker role in curbing the earnings management practices of first-generation family firms. Overall, the results exhibit that generational involvement significantly influences the association between family firms and earnings management and moderates the relationship between board independence and earnings management. These results are robust to sensitivity measures.Originality/valueThis is the first study that examines the moderating impact of family business generation on the association between board independence and earnings management according to the author’s knowledge. Besides, this is among the earlier attempts to investigate the earnings management practices of Indian family firms.

The Role of Board Independence and Ownership Structure in Improving the Efficacy of Corporate Financial Distress Prediction Model: Evidence from India

The study aimed to investigate the role of non-financial measures in predicting corporate financial distress in the Indian industrial sector. The proportion of independent directors on the board and the proportion of the promoters’ share in the ownership structure of the business were the non-financial measures that were analysed, along with ten financial measures. For this, sample data consisted of 82 companies that had filed for bankruptcy under the Insolvency and Bankruptcy Code (IBC). An equal number of matching financially sound companies also constituted the sample. Therefore, the total sample size was 164 companies. Data for five years immediately preceding the bankruptcy filing was collected for the sample companies. The data of 120 companies evenly drawn from the two groups of companies were used for developing the model and the remaining data were used for validating the developed model. Two binary logistic regression models were developed, M1 and M2, where M1 was formulated with both financial and non-financial variables, and M2 only had financial variables as predictors. The diagnostic ability of the model was tested with the aid of the receiver operating curve (ROC), area under the curve (AUC), sensitivity, specificity and annual accuracy. The results of the study show that inclusion of the two non-financial variables improved the efficacy of the financial distress prediction model. This study made a unique attempt to provide empirical evidence on the role played by non-financial variables in improving the efficiency of corporate distress prediction models.

The Effect of the Characteristics and Activities of the Board of Directors on Sustainable Development Goal (SDG) Disclosures: Empirical Evidence from Southeast Asia

This study aimed to analyze the board of directors’ commitment to the Sustainable Development Goals (SDGs) by looking at the influence of the characteristics and activities of the board of directors and the existence of Corporate Social Responsibility (CSR) committees on disclosures regarding the SDGs. The directors’ characteristics that were analyzed in this research included the board size, the proportion of independent directors, the presence of female directors, and the presence of foreign directors. The activities analyzed included the number of board meetings held in one year and the percentage of directors in meetings. The context of this study was companies in five Southeast Asian countries—Indonesia, Malaysia, Singapore, Thailand, and the Philippines—during the 2016 and 2017 reporting years. This study was an initial research work aiming to empirically examine the effect of the board of directors on SDG disclosures in public companies from five countries in Southeast Asia. The study shows that the percentage of attendance of board directors’ meetings and the existence of CSR committees positively affected SDG disclosures. It also indicates that the presence of the board at the meeting can encourage more intensive SDG disclosures. Companies with a high commitment to sustainability, as shown by their forming of CSR committees, also tended to have a higher level of SDG disclosures.

The Relationship between Corporate Governance Characteristics and Earnings Quality---Takes the IT Industry of China Listed Companies as a Sample

Since the meeting of China Securities Regulatory Commission in 2020 once again emphasized the issue of earnings quality of corporate governance, this paper intends to study this issue from different perspectives. This study takes the IT industry of China's A-share listed companies from 2015 to 2019 as the sample, and makes an empirical analysis with the fuzzy set/ Qualitative Comparative Analysis (fs/QCA). The results show that the companies with large scale and good corporate governance concept, poor financial structure but with the assistance of external experts, high salary and high proportion of independent directors have relatively high earnings quality. According to the above research results. According to the findings, we put forward the following suggestions. For enterprises, good corporate governance concept and the concept of integrity are very important, but there must be efficient operation of the board of directors in order to play the role of corporate governance. Therefore, the size of the board of directors should not be too large, but it can be adjusted flexibly depends on whether the required professionals are enough. In addition, enterprises with poor financial structure should rely on the assistance of professional managers, rather than using earnings manipulation to obtain short-term benefits. For the regulators of listed companies, the procedures of independent directors’ selection should be more strictly supervised, so as not to make the setting of independent directors become mere formality. For investors, we should always pay attention to the corporate governance, and announce the disclosure of real-time information about directors, supervisors and senior executives, to prevent losses caused by investment misjudgment.

THE INFLUENCE OF BOARD CHARACTERISTICS AND STATE HOLDING ON CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE, EVIDENCE FROM VIETNAMESE LISTED FIRMS

Analysing the nexus between board diversity, CEO power, state holding, and corporate social responsibility disclosure in an emerging country: Vietnam, where some listed firms are held significantly by the State, is the fundamental objective of this study. In order to achieve this goal, we employed regression analysis using panel data. While board diversity consists of board gender diversification and board independence and CEO (executive) power, consisting of executive duality, executive holding (ownership), and deputy CEO, and state ownership are explanatory variables, and CSR disclosure is a dependent variable. The sample contains of 166 Vietnamese listed firms at the Hanoi Stock Exchange (HNX) for 2014−2016. After performing regression analysis, the result revealed that the proportion of female directors, deputy CEO, and state holding had a significant correlation with CSR publication. In contrast, the proportion of independent directors, CEO duality, and CEO ownership was found to be insignificant. Our research adds to the research on firm governance and CSR in several approaches. First, the paper adds to the study on the advancement of research toward corporate social responsibility and firm governance and CEO features impress on it. Second, our research expands CSR literature in developing countries, which has not been treated in detail. Fourth, this research advances and adds literature to some theories, including agency theory and resource-based view theory.

Voluntary appointment of independent directors: evidence from Taiwan

PurposeUsing a data set of Taiwanese listed firms from 2002 to 2015, this paper aims to examine the determinants to voluntarily appoint independent directors.Design/methodology/approachThis study uses panel estimation to exploit both the cross-section and time-series nature of the data. Further, this paper uses Tobit regression, generalized linear model (GLM) in the additional analysis and the two-stage least squares to mitigate for a possible endogeneity issue.FindingsThe main findings show that Taiwanese firms with large board sizes tend to voluntarily appoint independent directors and firms that already have independent supervisors more willingly to accept additional independent directors onto the board. Furthermore, ownership concentration and institutional ownership are positively associated with the voluntary appointment of independent directors. On the contrary, firms controlled by family members are generally reluctant to voluntarily appoint independent directors.Research limitations/implicationsThe findings are important for managers, shareholders, creditors and policymakers. In particular, when considering the determinants of the voluntary appointment of independent directors, the results indicate that independent supervisors, outside shareholders and institutional investors are significant factors in influencing effective internal and external corporate governance mechanisms. This research work focuses on the voluntary appointment of independent directors. It would be interesting to compare the effectiveness of voluntary appointments with a mandatory appointment within Taiwan and with other jurisdictions.Originality/valueThis study incrementally contributes to the corporate governance literature in several ways. First, this study extends the earlier research by using a more comprehensive data set of non-financial Taiwanese firms and using alternative methodologies to investigate the determinants of voluntary appointment of independent directors. Second, prior studies tend to neglect the possible issue of using a censored and fractional dependent variable, the proportion of independent directors, which might yield biased and inconsistent parameter estimates when using ordinary least squares regression estimation. Finally, this study addresses the relevant econometric issues by using the Tobit, GLM and the two-stage least squares for a possible endogeneity concern.

The Effect of Good Corporate Governance and Sustainability Report on Company Performance

This study examines the effect of good corporate governance and sustainability report on company performance. Good corporate governance is dependent on the size of the board of directors, the proportion of independent commissioners, the size of the audit committee, institutional ownership, management ownership. Sustainability report is facilitated by economic, environmental and social aspect as well as disclosure index. While Company performance is generated by Return on Assets (ROA). This research was conducted on companies listed on the Indonesia Stock Exchange between 2014-2018. The purposive sampling technique was used. Hypothesis testing was done by linear regression analysis. The results of testing the first variable showed that institutional ownership affects ROA and has a negative relationship direction. While the size of the board of directors, the proportion of independent directors, the size of the audit committee, and management ownership have no effect on ROA. However, the result of the second variable showed that the disclosure of economic aspects affects ROA and has a positive relationship direction. While disclosure of environmental and social aspects does not affect ROA.

PENGARUH KEPEMILIKAN MANAJERIAL DAN PROPORSI KOMISARIS INDEPENDEN TERHADAP KUALITAS LABA DENGAN KEPEMILIKAN PENGENDALI SEBAGAI VARIABEL MODERASI

Ownership structure is very important because it is closely related to the operational control of the company. From the point of view of the theory of accounting, earnings management is determined by the motivation of the company manager. Different motivations will result in a different amount of earning management, such as the manager who also shareholders of the company with a manager who is not a shareholder and board composition also plays an important role in control of what is done by the executive or the board of directors as well as monitoring the effectiveness of the board of commissioners are affected by some degree of ownership concentration, and the relationship between managerial ownership with earnings quality is interaction by ownership concentration. This study aimed to determine the effect of managerial ownership on earnings quality, the proportion of independent directors on the quality of earnings, the interaction between managerial stock ownership by the controlling stake of the quality of earnings and the interaction between the proportion of independent directors with a controlling stake of the quality of earnings. The research sample using companies listed in Indonesia Stock Exchangein 2009-2011. “The technique of purposive sampling method. “These result indicate that managerial ownership has a negative effect on the quality of earnings, proportion of independent directors has a positive effect on the quality of earnings, the interaction between managerial stock ownership with no controlling shareholding positive effect on earnings and the quality of interaction between the proportion of independent directors with a controlling shareholding positive effect on earnings quality .

TAX AGRESSIVENESS IN FAMILY FIRMS: CAN CORPORATE GOVERNANCE MITIGATE IT?

Every taxpayers objectives is to minimize the tax paid to government. Few business tried to avoid tax more agressively than the others. This research will tried to investigate whether the family firms are more tax agressive compare to non family firms. Tax agressiveness might be reduced if there is a working governance structure. This research will also investigate whether the governance structure (i.e size of board of director, proportion of independent director, external audit firms, and audit committee) would significantly reduced the tax agressiveness. To control the results, researcher used size, profitability and leverage.
 This research was quantitative explanatory research. Researcher will analyzed 15 out of 57 family own-business in Indonesia, and make a comparison with non family firms. Researcher examined the financial statements and annual report from year 2011 – 2015. The research will used multiple regression analysis as a data analysis tools. This research will produce tax agressiveness analysis of family firms, non family firms, and combination of both firms.
 The research showed that, contrast to the non family firms, family firms had agressive tax avoidance scheme. The research also showed that corporate governance in family company in fact, increasing the agressiveness o tax avoidance, while non family firms corporate governance reduced the agressiveness of tax avoidance. Overall this research showed that family business need to improve the governance structure to control its agressive tax avoidance.
 
 Keywords: Corporate Governance, Family Business, Ownership, Tax Avoidance.

The impact of board characteristics and CEO power on banks’ risk-taking: stable versus crisis periods

We examine the impact of board structure, CEO power and other bank-specific factors on bank risk-taking for a sample of 72 publicly listed European banks in both stable and crisis periods. Using a simultaneous equations approach, our main findings indicate that the proportion of independent directors, the board size, and Chief Executive Officer (CEO) power affected bank risk-taking negatively during the recent financial crisis. On the contrary, institutional shareholder ownership and the presence of an ex-CEO as Chairman influenced bank risk-taking positively. Additionally, we separately analyse stable and crisis periods and observe that in the pre-crisis period only board independence and institutional ownership keep the same impact on risk while CEO power has no influence and the existence of an ex-CEO as Chairman reduces risk-taking by banks. We conclude that different governance characteristics have different relevance for banks' risk-taking contingent on the economic environment being one of stability or crisis.

The influence of board characteristics on environmental performance: evidence from East Asian manufacturing industries

PurposeThe purpose of this study is to examine the influence of board characteristics on environmental performance in manufacturing firms of the emerging East Asian markets. The authors adopt a triple perspective of environmental performance that focusses on three major environmental areas including resource reduction, emission reduction and product innovation.Design/methodology/approachThe authors consider three main board characteristics, namely, board size, board independence and board leadership structure, and investigate their impacts on a multidimensional construct of environmental performance. Specifically, both linear and quadratic functions are applied to address a possibility of the non-linear relationship between board size and environmental performance. The authors use fixed-effects estimations on a sample of manufacturing firms in the emerging East Asian countries between 2011 and 2016.FindingsThe study explores an inverse U-shaped relationship between board size and environmental performance. The authors also reveal that manufacturing firms are more likely to have better environmental performance when the proportion of independent directors on board increases. However, the separation of CEO and board chair roles has no impact on environmental performance.Practical implicationsThe findings have important implications by identifying the role of a board of directors in implementing environmental protection strategies and by providing a foundation for corporate efforts to enhance sustainable development.Originality/valueThe study provides complete understanding of environmental performance as a multidimensional construct and sheds light on the influence of board characteristics, especially the inverse U-shaped influence of board size, on environmental performance in the East Asian manufacturing industries.

BOARD OF DIRECTORS QUALIFICATION AND COMPOSITION: STUDY OF ITS IMPACT ON SERVICE SECTOR OF INDIA

The purpose of this study was to determine the effects of education and composition of Board of Directors on the performance of firms listed at the Bombay Stock Exchange (BSE). The target population of this explanatory research study comprises of top performers of service sector firms listed at the Bombay Stock Exchange. The secondary data from the financial statements and annual reports of the listed companies covering the year 2015-19 was considered for the study. The correlation matrix and linear regression analysis technique was used to determine the effect of independent variables i.e. size of board, proportion of board with post-graduation qualification and proportion of independent directors in the board on the dependent variable i.e. return on equity and return on capital employed. The study findings indicate size of BODs and independence of BODs has insignificant and negative impact on the firm performance. On the other hand percentage of directors having post-graduation degree has positive and notable impact on the performance of the firm.

Corporate Governance and Voluntary Disclosure Practices in Czech Republic

The decision to disclose enough information in annual reports is seen as an act of transparency. This study seeks to measure the extent of voluntary disclosure and to examine the relationship between corporate governance determinants and the level of voluntary disclosure. The study reports an average of 51.5% as the level of voluntary disclosure. Four corporate governance variables are used as the basis for the regression analysis. The evidence shows a positive association between the level of voluntary disclosure and the proportion of independent directors, block holder and the proportion of the audit committee with only the proportion of audit committee to the board showing statistical significance. The board size has a negative association. The category of corporate governance information items as part of the total voluntary checklist is largely disclosed among Czech firms. The study contributes to the literature on voluntary disclosure in a transition economy. The findings prove useful to investors and financial statement preparers as the knowledge informs them to question and request more information from the firms which are open to the capital market.

A Study on the Relationship between Accrual Earnings Management and Cash Flow Manipulation

Recently exposed financial fraud cases show that the financial manipulation means of enterprises are becoming more and more complex, showing the characteristics of the coordination between accrual earnings management and cash flow manipulation. However, the existing literature either ignores the particularity of cash flow manipulation based on cash basis and does not consider the difference between cash flow manipulation and real earnings management, or fails to alleviate the endogeneity between the two types of earnings management and pay no attention to the internal interaction and interaction mechanism between them.Based on the understanding that cash flow manipulation is different from real earnings management, this paper selects Chinese A-share listed companies from 2007 to 2018 as research samples, and establishes the simultaneous equation model and adopts the three-stage least squares（3SLS）method to study the internal interaction between accrual earnings management and cash flow manipulation. It is found that there is a two-way asymmetric interaction between accrual earnings management and cash flow manipulation, that is, there is an interaction between cash flow manipulation and accrual earnings management, but in the process of cooperative control, the magnitude of cash flow manipulation is usually larger than the corresponding magnitude of accrual earnings management. When enterprises carry out positive accrual earnings management, the interaction between them will be stronger. Further research shows that excessive debt will further deepen the interaction between the two. Compared with state-owned enterprises, the coordination between accrual earnings management and cash flow manipulation in non-state-owned enterprises is more serious. Internal control, managerial stock holdings and proportion of independent directors, as the main means of corporate governance, have a significant inhibitory effect on the above relationship.The main contributions of this paper are as follows: Firstly, by establishing a simultaneous equation model, this paper uses the 3SLS method to conduct an empirical analysis on the relationship between accrual earnings management and cash flow manipulation, which alleviates the endogeneity between variables and improves the scientificity of the research results. In addition, it deeply studies the interactive mechanism, focuses on the direction and symmetry of the above-mentioned relationship, and deepens the understanding of the relationship between accrual earnings management and cash flow manipulation. Secondly, this paper studies the regulating effect of the relationship between accrual earnings management and cash flow manipulation on debt stress motivation, and provides new evidence to clarify the regulatory focus of interactive fraud and reveal the internal linkage of the three major financial statements when financial fraud takes place. Finally, this paper is helpful to reveal the internal relationship between cash flow manipulation and accrual earnings management, as well as the interactive mechanism of the three major statements in the process of corporate financial manipulation. And it has enlightenment significance for comprehensively and accurately understanding the mutual influence and external influence of various financial manipulation behaviors, and building comprehensive and systematic governance, auditing, and supervision mechanism based on corporate financial manipulation.

How do external auditor attributes impact corporate social responsibility disclosures: empirical evidence from ADX-listed companies

PurposeThis paper aims to highlight the relationship between the attributes of external auditor companies and voluntary corporate social responsibility (CSR) disclosures of audited firms using a sample of Abu Dhabi Securities Exchange (ADX)-listed companies.Design/methodology/approachBased on a sample of 410 firm-year observations for the period 2010–2016, this study first computes an eight-item CSR disclosure index, then ran a multivariate regression analysis between CSR disclosure scores and external auditor attributes, along with client firm characteristics and additional control variables. Finally, this paper performs various additional robustness checks.FindingsThe results reveal that external auditor attributes have a significant impact on shaping the CSR disclosures of ADX-listed firms. Overall, auditor age, size, industry specialisation and portfolio diversification positively affect the level of customers’ CSR disclosures. By contrast, the magnitude of audit fees and auditor experience in the UAE has no impact on the CSR disclosures of ADX-listed firms. This study controls for client firm size, financial leverage, ownership concentration and the proportion of independent directors on companies’ board of directors. The results remain robust to additional sensitivity checks such as audit company CSR practices, extreme quartiles of CSR disclosures and the panel data estimation method.Research limitations/implicationsThe research exhibits some limitations. First, this paper uses a simple index to measure CSR disclosures based on previous empirical studies, especially those related to emergent markets, which are not free from bias due to the lack of voluntary disclosure transparency for some companies listed on ADX. Second, although this study uses a seven-year observation period, the total number of observations remains limited due to ADX size. Third, other context-specific disclosures should be included such as cultural and governance variables (royal families ownership).Practical implicationsThe study highlights the role of external attributes that can affect companies’ CSR disclosure policy, rather than firm-specific factors. The study also reshapes the concept of auditor quality beyond the dichotomy (“Big Four”/non-Big Four) used in the current literature.Originality/valueThe research adds to the current literature on CSR by revealing the impact of external auditor attributes on client firm CSR disclosure policy in an emerging market, the ADX.

The impact of boards of directors’ characteristics on cash holdings in uncertain times

This study examines the relationship between the board of directors and cash holdings before and during the global financial crisis. We focus on the main demographic characteristics of the board: CEO duality, independent directors, and board size. Employing a sample of listed Italian industrial firms over the period 2003–2013, our empirical findings show the different behaviors of the members of the board of directors in determining cash holdings in normal conditions and during a crisis. In normal periods, in line with agency theory, a vigilant board—characterized by a high proportion of independent directors—reduces cash holdings. Diversely, the presence of CEO duality and larger boards increase cash holdings. In times of crisis, members of the board of directors abandon their monitoring duties or opportunistic behavior and become more participative to help the firm to survive. The results suggest that the effects of the board of directors’ characteristics are contingent on a firm’s external environment.