scholarly journals Gender diversity, corporate governance and financial risk disclosure in the UK

2020 ◽  
Vol 62 (6) ◽  
pp. 521-538 ◽  
Author(s):  
Idris M. Bufarwa ◽  
Ahmed A. Elamer ◽  
Collins G. Ntim ◽  
Aws AlHares
Keyword(s):  
Corporate Governance ◽  
Financial Risk ◽  
Good Practice ◽  
Gender Diversity ◽  
Risk Disclosure ◽  
Board Size ◽  
Content Type ◽  
Industrial Sectors ◽  
The Uk ◽  
The Impact

Purpose This study aims to investigate the impact of corporate governance (CG) mechanisms on financial risk reporting in the UK. Design/methodology/approach The study uses a panel data of 50 non-financial firms belonging to 10 industrial sectors listed on the London Stock Exchange in the period 2011-2015. Multivariate regression techniques are used to examine the relationships. Findings The findings of this study reveal that CG has a significant influence on financial risk disclosure. Specifically, it is found that block ownership and board gender diversity have a positive effect on the level of corporate financial risk disclosure (FRD). While there is no significant relationship between board size and corporate FRD. Research limitations/implications This study has significant implications for policy-makers, investors and regulators. Evidence of growing FRD implies that efforts by several stakeholders have had some positive impact on the level of FRD in the firms examined. Examples of such changes include, namely, increasing board size and gender diversity acting as effective firm level advisors and monitors of FRD. As a consequence, regulators and policymakers should continually pursue reforms to encourage firms to follow CG principles that are promoted as good practice. Originality/value This study adds to the emerging body of literature on CG–risk disclosure relationships in the UK context using content analysis. The study also highlights that gender diversity enhances FRD.

Risk reporting appraisal in post-revolutionary Tunisia

2018 ◽  
Vol 16 (4) ◽  
pp. 522-542 ◽  
Author(s):  
Wael Hemrit
Keyword(s):  
Corporate Governance ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Risk Information ◽  
Risk Disclosure ◽  
Board Size ◽  
Content Type ◽  
Tunisian Revolution ◽  
The Impact ◽  
Risk Reporting

Purpose This paper aims to investigate the determinants of operational and liquidity risk reporting for the Tunisian insurance and banking sectors after the outbreak of the Tunisian revolution on 14 January 2011. Design/methodology/approach A manual content analysis approach was used to measure risk disclosure by counting the number of risk-related words within risk-related sentences in a wide range of publications. Findings The results show that operational risk disclosure is associated positively with operational losses frequency, institution size and the proportion of independent non-executive members of the board of directors. Also, board size is found to be negatively associated with risk disclosure. Moreover, net stable funding ratio, size and proportion of independent non-executive members have a positive effect on liquidity risk disclosure. The authors also discover that infrequency of board meetings and the presence of young members on the board increase the extent of liquidity risk information. Research limitations/implications The research focuses on a small number of observations which somewhat restrict the generalization of results to the entire class of financial sector in Tunisia. Also, the qualitative character of some supposed explanatory variables (frequency and severity of operational risk) relies heavily on the experiences of interviewees and their basic perceptions. Practical implications Investors might do well to rely on such characteristics (large board size, less active board and a high proportion of non-executive directors) to predict the disclosure of risk information, either operational or liquidity risk. Board members should keep an eye on reporting on risk, by promoting the success keys of governance, because good corporate governance has to be recognizable at first to be an effective value driver. Originality/value The findings rationalize the debate over the impact of improved corporate governance on risk disclosure practices within the context of the Tunisian revolution. The logic of this rationalization may help to promote political incentives that will encourage a risk management culture based on a dynamic communication framework.

Gender diversity in corporate boardrooms and risk disclosure: Indian evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ridhima Saggar ◽  
Nischay Arora ◽  
Balwinder Singh
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Shannon Index ◽  
Women Directors ◽  
Risk Disclosure ◽  
Content Type ◽  
Financial Firms ◽  
Corporate Risk ◽  
The Impact ◽  
The Relationship

Purpose The study aims to pervade the gap in the domain of risk disclosure and gender diversity, which is comparatively uncharted. Gender diversity being a crucial element of corporate governance can deepen understanding on the issue in the backdrop of a developing country such as India, so this study aims to investigate the relationship between gender diversity on board and corporate risk disclosure. Design/methodology/approach Four measures of gender diversity, i.e. BLAU index, SHANNON index, proportion of women directors on board and female dummies, have been deployed to measure gender diversity. The empirical analysis is premised on a sample of S&P BSE 100 index pertaining to the 2018–2019 financial year; which eventually gets reduced to 70 non-financial firms after eliminating 30 financial firms. To examine the impact of gender diversity on corporate risk disclosure, hierarchical regression has been used. Additionally, two-stage least square regression analysis has been performed for checking the endogeneity issues in data and validating the findings of the study. Findings The main findings unveil that gender diversity positively impacts corporate risk disclosure. Confirming the agency theory and resource dependency theory, its alternative measures like BLAU index, SHANNON index, proportion of women directors and female dummy divulged to positively impact corporate risk disclosure. When women dummy has been used, analysis unmasked that firms electing more than one female director on board has a higher positive impact on corporate risk disclosure as compared to firms engaging only one women director on board. Research limitations/implications The study is undertaken in the Indian settings, which has its own set of legislative laws, whereas there is need to reaffirm the relationship applying cross-country analysis. Furthermore, there is huge hollowness in the domain of gender diversity and risk disclosure that calls for empirical evidence to unearth futuristic vision. Practical implications The research presents managerial implications for the managers to promote gender egalitarianism by electing higher quantum of women directors on board to achieve global standards of maintaining higher risk disclosure. Adequate risk disclosure on a gender-diverse board further assures the investors that their interest will remain intact in the organization that meets legal requirements by embracing gender equality in employment. A woman in the boardrooms incarnates transparency through divulgence of risk information, which suffices the informational needs of investors. In addition, the findings insists the regulators towards staunch enforcement of effective corporate governance practice through increasing the proportion of women directors on board as they assist in dispelling risk disclosure, which will avert sceptical ambitions of managers and deconstruct their stereotype attitude towards women. Originality/value This study is a novel contribution in expanding the risk disclosure literature by analyzing the unexplored impact of gender diversity on the extent of corporate risk disclosures in India.

Corporate governance practices and capital structure decisions: the moderating effect of gender diversity

2020 ◽  
Vol 20 (5) ◽  
pp. 939-964
Author(s):  
Mohammad A.A Zaid ◽  
Man Wang ◽  
Sara T.F. Abuhijleh ◽  
Ayman Issa ◽  
Mohammed W.A. Saleh ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Capital Structure ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Business Environment ◽  
Board Structure ◽  
Content Type ◽  
Financing Decisions ◽  
The Impact

Purpose Motivated by the agency theory, this study aims to empirically examine the nexus between board attributes and a firm’s financing decisions of non-financial listed firms in Palestine and how the previous relationship is moderated and shaped by the level of gender diversity. Design/methodology/approach Multiple regression analysis on a panel data was used. Further, we applied three different approaches of static panel data “pooled OLS, fixed effect and random effect.” Fixed-effects estimator was selected as the optimal and most appropriate model. In addition, to control for the potential endogeneity problem and to profoundly analyze the study data, the authors perform the one-step system generalized method of moments (GMM) estimator. Dynamic panel GMM specification was superior in generating robust findings. Findings The findings clearly unveil that all explanatory variables in the study model have a significant influence on the firm’s financing decisions. Moreover, the results report that the impact of board size and board independence are more positive under conditions of a high level of gender diversity, whereas the influence of CEO duality on the firm’s leverage level turned from negative to positive. In a nutshell, gender diversity moderates the effect of board structure on a firm’s financing decisions. Research limitations/implications This study was restricted to one institutional context (Palestine); therefore, the results reflect the attributes of the Palestinian business environment. In this vein, it is possible to generate different findings in other countries, particularly in developed markets. Practical implications The findings of this study can draw responsible parties and policymakers’ attention in developing countries to introduce and contextualize new mechanisms that can lead to better monitoring process and help firms in attracting better resources and establishing an optimal capital structure. For instance, entities should mandate a minimum quota for the proportion of women incorporation in boardrooms. Originality/value This study provides empirical evidence on the moderating role of gender diversity on the effect of board structure on firm’s financing decisions, something that was predominantly neglected by the earlier studies and has not yet examined by ancestors. Thereby, to protrude nuanced understanding of this novel and unprecedented idea, this study thoroughly bridges this research gap and contributes practically and theoretically to the existing corporate governance–capital structure literature.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

scholarly journals Impact of governance structures on environmental disclosures in the Middle East and Africa

2020 ◽  
Vol 20 (4) ◽  
pp. 739-763 ◽  
Author(s):  
Erhan Kilincarslan ◽  
Mohamed H. Elmagrhi ◽  
Zezeng Li
Keyword(s):  
Corporate Governance ◽  
Middle East ◽  
Gender Diversity ◽  
Governance Structures ◽  
Environmental Disclosure ◽  
Content Type ◽  
Environmental Disclosures ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This study aims to investigate the impact of corporate governance structures on environmental disclosure practices in the Middle East and Africa (MEA). Design/methodology/approach The research model uses a panel data set of 121 publicly listed (non-financial and non-utility) firms from 11 MEA countries over the period 2010-2017, uses alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness. Findings The empirical results strongly indicate that MEA firms with high governance disclosures tend to have better environmental disclosure practices. The board characteristics of gender diversity, size, CEO/chairperson duality and audit committee size impact positively on MEA firms’ voluntary environmental disclosures, whereas board independence has a negative influence. Research limitations/implications This study advances research on the relationship between corporate governance structures and environmental disclosure practices in MEA countries, but is limited to firms for which data are available from Bloomberg. Practical implications The results have important practical implications for MEA policymakers and regulators. The positive impact of board gender diversity on firms’ environmental disclosures, policy reforms should aim to increase female directors. MEA corporations aiming to be more environmentally friendly should recruit women to top managerial positions. Originality/value This is thought to be the first study to provide insights from the efficiency and legitimation perspectives of neo-institutional theory to explain the relationship between MEA firms’ internal governance structures and environmental disclosures.

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

2017 ◽  
Vol 25 (4) ◽  
pp. 459-483 ◽  
Author(s):  
Mohamed H. Elmagrhi ◽  
Collins G. Ntim ◽  
Richard M. Crossley ◽  
John K. Malagila ◽  
Samuel Fosu ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Audit Committee ◽  
Gender Diversity ◽  
Negative Relationship ◽  
Corporate Board ◽  
Board Size ◽  
Content Type ◽  
Board Gender Diversity ◽  
Alternative Investment

Purpose The 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/approach The data are analysed by employing multivariate regression techniques, including estimating fixed effects, lagged effects and two-stage least squares regressions. Findings The 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/value This 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.

scholarly journals Corporate Governance and the Earnings Quality of Nigerian Firms

2020 ◽  
Vol 11 (5) ◽  
pp. 161
Author(s):  
Festus Oladipupo Olaoye ◽  
Ademola Adeniran Adewumi
Keyword(s):  
Corporate Governance ◽  
Comprehensive Evaluation ◽  
Earnings Quality ◽  
Gender Diversity ◽  
Annual Reports ◽  
Board Independence ◽  
Manufacturing Companies ◽  
Board Size ◽  
Board Gender Diversity ◽  
The Impact

The focus of the study is to examine the impact of corporate governance on earnings quality in listed firms in Nigeria. The specific objective is to investigate the effect of board size, board independence and board gender diversity on earnings quality. This study was carried out with secondary data retrieved from corporate annual reports of the sampled companies and the data was analysed using panel regression on a sample of 37 quoted manufacturing companies for the period 2011-2017. On the overall, the result reveals that Board size, board independence and board gender diversity used for measuring corporate governance show significant impact on earnings quality. In addition, corporate governance variables appear to be quite sensitive to the measure of earnings quality used. Based on the findings, the study recommends the need for comprehensive evaluation of corporate governance systems of companies. The study recommends the need for more level of board independence. The diversity issue though is gaining momentum in corporate governance literature can still be regarded as not as dominant as compared to others especially as it relates to protecting shareholder rights and framing dividend policy. The significance of the variable nevertheless suggests that companies should thrive to achieve an appropriate diversity mix.

The impact of VC backing on the corporate governance of Chinese IPOs

2017 ◽  
Vol 29 (3) ◽  
pp. 330-355 ◽  
Author(s):  
Qing (Sophie) Wang ◽  
Hamish D. Anderson ◽  
Jing Chi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Independent Directors ◽  
Board Independence ◽  
Board Size ◽  
Content Type ◽  
Shareholder Protection ◽  
Political Ties ◽  
The Impact ◽  
Industry Experience

Purpose The purpose of this paper is to investigate how venture capital (VC) backing influences the board size and independence and how VC backing and board structure impact firm performance in China. Design/methodology/approach Using hand-collected data from 924 initial public offering (IPO) prospectuses covering the period from January 2004 to December 2012, the authors investigate the impact of VC backing on board size, board independence and firm market performance through regression analysis. A two-stage approach is also used to address the endogeneity issue. Findings The authors find robust evidence that VC-backed IPOs have more independent boards, after controlling for CEO and firm characteristics, and the potential endogeneity concerns. Furthermore, firms backed by VCs with management political ties (PTs) have more independent directors with industry relevant expertise than other firms. While no significant relationship is found between board independence and firm performance, the authors present some evidence that IPOs which have a larger percentage of independent directors with industry relevant expertise exhibit higher long-term stock returns, and VCs with management PTs also improve IPO long-run stock performance. Research limitations/implications Although VC is new in China and the Chinese capital market has relative poor corporate governance and weak minority shareholder protection, the authors find support in this paper that VC backing is valuable to IPO firms in China not only through providing funding but also by providing political ties and industry experience. However, Chinese regulatory and institutional settings have strong impact on test results and they change rapidly, so the results may not apply to other period in Chinese markets. Originality/value This paper sheds lights on the influences of VC backing on corporate governance and firm performance in a transitional and emerging economy. It discovers the value of VC investors in a transitional economy as of providing political ties and industry experience. The new definition of independent directors suggested by Suchard (2009) is first used by our paper in the Chinese context.

CEO incentive compensation and earnings management

2016 ◽  
Vol 54 (10) ◽  
pp. 2447-2461 ◽  
Author(s):  
Madi Almadi ◽  
Philip Lazic
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Future Research ◽  
Content Type ◽  
Institutional Settings ◽  
Legal Enforcement ◽  
Anglo American ◽  
Corporate Governance Quality ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of CEO incentive-based compensation on earnings management, taking into account the influence of institutional settings and corporate governance systems. Design/methodology/approach Using archival data of 3,000 British, Australian, German, and Austrian firm-years between 2005 and 2014, the study applies fixed-effect estimator to reduce risks of endogeneity bias. Findings The findings reveal that institutional factors influence the relationship between CEO incentive-based compensation and earnings management. Particularly, firms from countries within the Anglo-American model (the UK and Australia), which provide greater protection for investor, stricter legal enforcement, and higher quality of corporate governance, tend to have lower level of earnings management. However, besides corporate governance quality, it is relevant to consider weaker investor protection and legal enforcement to motivate earnings management in firms from countries within the Euro-Continental model (Germany and Austria). Originality/value The study suggests that robust implementation of corporate governance, derived from either model, helps in restraining CEO opportunistic behavior. Importantly, more qualified institutions have higher impact on the relative adequacy of CEO incentive-based pay formulas in mitigating earnings management concerns. This can be extended by future research through comparative studies using other contexts or influential institutions.

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