Determinants of corporate corruption disclosures: evidence based on EU listed firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bikki Jaggi ◽  
Alessandra Allini ◽  
Gianluca Ginesti ◽  
Riccardo Macchioni
Keyword(s):  
Legal System ◽  
Common Law ◽  
Gender Diversity ◽  
Independent Directors ◽  
Corporate Board ◽  
Content Type ◽  
Listed Firms ◽  
Female Directors ◽  
Eu Directive ◽  
The Impact

Purpose This study aims to examine the impact of corporate board characteristics and country-level legal system on corruption disclosures mandated by the recent European Union (EU) Directive No. 95/2014. Design/methodology/approach Based on a sample of 234 European listed companies and covering the 2017–2018 period, this study uses regression analyses to empirically test the association of independent directors, board gender diversity and country’s legal system with disclosure of corruption information. Findings The presence of independent directors and female directors is positively associated with corporate corruption disclosures. The association between independent directors and corruption disclosures is especially strong when firms are operating in the common law environments. Research limitations/implications This study is exclusively focused on larger European listed firms and therefore the findings may not be valid for small and medium firms. Practical implications This study provides important information to policymakers to have a better understanding of the factors that influence firms’ disclosure policy on corruption-related activities. It also offers useful information to investors because it shows firms’ propensity to disclose corruption information that would enable them to evaluate their risk and return better. Originality/value To the best of the authors’ knowledge, this is the first study that evaluates firms’ response to the EU Directive No. 95/2014 in disclosing corruption information after its implementation in 2017. It documents the effective role played by female directors in influencing firms’ information disclosure policies. It also confirms that common law environment is more conducive to disclosures.

scholarly journals Does gender diversity on the board reduce agency cost? Evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Amin ◽  
Ramiz Ur Rehman ◽  
Rizwan Ali ◽  
Collins G. Ntim
Keyword(s):  
Gender Diversity ◽  
Business Environment ◽  
Agency Cost ◽  
Agency Conflicts ◽  
Content Type ◽  
Listed Firms ◽  
Financial Firms ◽  
Female Directors ◽  
Board Gender Diversity ◽  
The Impact

Purpose This study aims to examine the effects of board gender diversity on agency costs in non-financial firms listed on the Pakistan Stock Exchange (PSX). Design/methodology/approach Multiple regression analysis is used to determine the impact of board gender diversity on agency cost. The research used panel data consisting of 2,062 firm-year observations of 226 non-financial firms listed on the PSX from 2008 to 2019 to test the proposed hypothesis. In addition, the Blau and the Shannon indices were used to checking for robustness. Findings The results indicate that female presence on the board significantly reduces the agency cost and, hence, mitigates the principal-agent conflict. Moreover, consistent with the critical mass theory, it was found that boards with three or more female directors have a stronger impact on reducing the agency cost, as compared to two or fewer female directors on the board. Research limitations/implications The sample was restricted to non-financial firms listed on the PSX only; therefore, the results reflect the attributes of Pakistan’s business environment. A similar analysis in the context of other countries may generate different results. Practical implications The findings imply that female directors play an important role in reducing agency conflicts between shareholders and managers by enhancing monitoring through effective governance mechanisms. The policymakers, therefore, should focus on female career development and encourage professional training programmes to generate a fair, competitive environment for senior female management. Originality/value This study attempts to fill the literature gap in that no similar study covers the non-financial firms’ listed firms in Pakistan. The paper supports the reforms made by the code of corporate governance by making the placement of female directors mandatory on Pakistani corporate boards. Overall, support is provided for the view that regulators should favour gender quotas regarding the composition of the board management team of listed firms to reduce agency conflicts and gain shareholder confidence.

Impact of board characteristics on firm dividends: evidence from India

2019 ◽  
Vol 19 (6) ◽  
pp. 1204-1215 ◽  
Author(s):  
Neeti Khetarpal Sanan
Keyword(s):  
Gender Diversity ◽  
Cash Flows ◽  
Independent Directors ◽  
Cross Sectional ◽  
Dividend Payout ◽  
Content Type ◽  
Board Characteristics ◽  
Female Directors ◽  
Free Cash Flows ◽  
The Impact

Purpose This study examined the impact of board size, independence and gender diversity on firm dividend payout. Furthermore, it examined whether the board characteristic–dividend payout relationship was moderated by free cash flows in the firm. Design/methodology/approach A total of 118 Indian firms representing multiple industries were examined for a period of four financial years from 2013 to 2016. The data are in panel form given the cross-sectional and time series nature of the study. Random effects specification was used for analysis Findings Results of the study indicated that the proportion of independent directors and proportion of female directors on the board have a negative and significant effect on dividend payout. In addition, the results showed a negative and significant moderating role of free cash flows, which implied that the magnitude of the impact of the proportion of independent directors and the proportion of female directors on the board on dividend payout is significantly greater in firms with high free cash flows. Overall, the results suggested that firms whose board characteristics signaled strong governance paid lower dividends. Originality/value This study contributes to a nuanced understanding of internal governance mechanisms by presenting evidence of the substitution hypothesis from an emerging economy, one in which firms operate within a unique regulatory framework of board composition.

Does gender diversity on boards reduce information asymmetry problems? Empirical evidence from the French market

2019 ◽  
Vol 10 (2) ◽  
pp. 144-166
Author(s):  
Nadia Loukil ◽  
Ouidad Yousfi ◽  
Raissa Wend-kuuni Yerbanga
Keyword(s):  
Asymmetric Information ◽  
Stock Market ◽  
Gender Diversity ◽  
Market Liquidity ◽  
Idiosyncratic Volatility ◽  
Independent Directors ◽  
Corporate Boards ◽  
Content Type ◽  
Bid Ask Spread ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of female members in boards of directors on asymmetric information in the French stock market. Design/methodology/approach The authors use two proxies for asymmetric information: the idiosyncratic volatility and the bid-ask spread. This study is conducted on all listed firms in the SBF 120 index between 2002 and 2012. Findings Results show that gender diversity in boardrooms has a negative effect on the level of private information in stock markets and reduces the bid-ask spread. However, these effects are significant in family-controlled firms: female inside directors significantly increase the idiosyncratic volatility and the bid-ask spread, while female independent directors decrease both proxies for stock market liquidity. Research limitations/implications Our empirical findings contribute to the current debate on the benefits of gender diversity on corporate boards from the market perspective. It shows that, under specific conditions, financial markets could be receptive to the presence of female directors in boardrooms. Practical implications Practitioners and policymakers advocate the benefits of gender diversity on corporate boards. This paper shows that when the protection of minority shareholders is poor, the stock market is receptive to the presence of women independent directors, only in family controlled firms. This is a further argument that could help women to overcome glass-ceiling barriers they usually face to achieve top management positions. Originality/value This paper provides support for the increased attention paid to gender-diverse boards. It addresses the market sensitivity toward the presence of women members in French boardrooms and their positions. This is the first paper, to the best of our knowledge, to address how appointing women to different positions in the boardroom could provide signals to investors in the presence of asymmetric information. French firms are mostly family controlled. Thus, the findings bring valuable information of the impact of board diversity on the stock market considering family and nonfamily firms.

Board independence, gender diversity and CEO compensation

2017 ◽  
Vol 17 (5) ◽  
pp. 845-860 ◽  
Author(s):  
Ramzi Benkraiem ◽  
Amal Hamrouni ◽  
Faten Lakhal ◽  
Nadia Toumi
Keyword(s):  
Ceo Compensation ◽  
Gender Diversity ◽  
Joint Effect ◽  
Independent Directors ◽  
Board Independence ◽  
Women Directors ◽  
Content Type ◽  
Corporate Managers ◽  
Board Decision Making ◽  
The Impact

Purpose This paper aims to investigate the joint effect of board independence and gender diversity on the effectiveness of boards in monitoring CEO compensation in a continental European context, i.e. France. Design/methodology/approach Fixed-effect regressions are used to study the impact of board independence, gender diversity and their interaction, i.e. the proportion of female independent directors on the different components of CEO compensation (total, fixed and variable). Findings The authors observe that both the proportions of independent directors and women sitting on the boards positively influence the various components of CEO compensation. However, the interaction of these factors, i.e. the proportion of female independent directors, is negatively associated with CEO compensation. These results suggest that independent women directors improve board effectiveness in monitoring CEO compensation, especially its fixed component. Originality/value The results of this research help to elucidate the importance of women being appointed to boards as independent directors to properly monitor managerial pay. These results provide support to the approach of the French Cope-Zimmerman law of January 2011, which promotes female representation on boards as independent directors to enhance board decision-making. Thus, evidence presented and discussed in this paper should provide useful insights for academics, corporate managers and regulators.

scholarly journals Does board structure drive dividends payout? Evidence from the Sultanate of Oman

2021 ◽  
Vol 18 (4) ◽  
pp. 218-230
Author(s):  
Badar Alshabibi ◽  
Shanmuga Pria ◽  
Khaled Hussainey
Keyword(s):  
Institutional Environment ◽  
Gender Diversity ◽  
Board Structure ◽  
Corporate Board ◽  
Listed Firms ◽  
Board Characteristics ◽  
Oil Crisis ◽  
And Gender ◽  
The Impact ◽  
New Evidence

The study investigates whether corporate board characteristics influence dividends policy in Omani listed firms. It also examines whether this relationship is determined by the recent global oil crisis. Using a sample of 109 listed firms in Muscat Securities Exchange between 2009 and 2019, we find that dividends payout is positively associated with board independence, board activity, and board nationality diversity. Though, no evidence is found that board size and gender diversity have an impact on dividends payout. Interestingly, when controlling for the global oil crisis, none of the corporate board attributes influence dividends payout. This study presents new evidence on the influence of board structure on dividends policy. The findings suggest that the impact of corporate board characteristics on dividends policy is contingent on the surrounding institutional environment (i.e., the recent global oil crisis).

Do female directors drive intellectual capital performance? Evidence from Indian listed firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Intellectual Capital ◽  
Value Added ◽  
Emerging Economy ◽  
Theory And Practice ◽  
Independent Directors ◽  
Female Representation ◽  
Content Type ◽  
Listed Firms ◽  
Female Directors ◽  
Capital Efficiency

PurposeThe purpose of this paper is to investigate the significance of board gender diversity (BGD) on the firm's intellectual capital (IC) performance of 272 Indian firms listed on the National Stock Exchange during 2007–2019. Considering the recent regulatory amendment by the Indian regulatory system (Security Exchange Board of India, 2018) which mandates at least one female independent directors on boards of all listed companies.Design/methodology/approachBased on theories and literature reviews, hypotheses were developed. This paper uses the proportion of female director on board and proportion of female independent directors to measure BGD and modified value-added intellectual coefficient (MVAIC) methodology to measure firms' IC performance. Two-step system-generalised method of moment panel data regression analysis has been employed to identify the variables that significantly affect IC performance.FindingsThis paper finds female representation on boards has a significant impact on MVAIC; capital employed efficiency shows the strongest association with female directors on board, followed by structural capital efficiency and human capital efficiency, while relational capital efficiency shows no significant effect. The results further demonstrate that female independent director has a significant but negative impact on IC.Research limitations/implicationsAs the study is limited to the listed firms of an emerging economy with a mandatory female quota for boards. Thus to increase the generalizability of findings, future research can be extended to include all listed and non-listed firms from another emerging economy with a mandatory female quota.Practical implicationsFrom the practical perspective, this study bridges the gap between theory and practice in terms of providing a deeper understanding to the policymakers and Indian regulatory bodies like the Ministry of Corporate Affairs and Securities Exchange Board on the importance of including female members on board as a vital contributing factor for leveraging firm's intangible performance.Originality/valueUsing resource dependency theory and agency, this study extends the literature on IC efficiency and female representation on boards by presenting the research outcome for Indian listed firms. This paper, addressing the recent changes introduced by Indian regulators and using the female independent directors on board, is amongst the first attempts to assess the relevance of BGD and IC performance. This issue has still not been discussed and analysed by researchers in India.

Impact of the busyness and board independence on the discretionary disclosures of Indian firms

2019 ◽  
Vol 61 (1) ◽  
pp. 250-265
Author(s):  
Kavitha D. ◽  
Nandagopal R. ◽  
Uma Maheswari B.
Keyword(s):  
Design Methodology ◽  
Negative Impact ◽  
Annual Reports ◽  
Independent Directors ◽  
Board Independence ◽  
Content Type ◽  
Future Studies ◽  
Listed Firms ◽  
Board Characteristics ◽  
The Impact

PurposeThe purpose of this paper is to empirically investigate the impact of board characteristics such as size, independence, busyness and duality on the extent of discretionary disclosures of listed Indian firms.Design/methodology/approachA disclosure index with 110 items was constructed to assess the discretionary disclosures in the annual reports of listed firms. The study measured disclosure using 1,024 firm-year observations over 8 years from 2009 to 2016. Board characteristics such as size, independence, busyness and duality have been used in the study as indicators of corporate governance.FindingsThe results indicate that while the proportion of independent directors positively impacts the extent of discretionary disclosures, boards with duality and the busyness of the director have a negative impact. The size of the board does not significantly impact the extent of disclosures.Research limitations/implicationsThis study examines the discretionary disclosures made only in the annual reports. Future studies could examine information disclosed in other media. Moreover, this study uses an un-weighted self-constructed disclosure index, which is subject to its inherent limitations.Originality/valueThis study has examined the impact of the “busyness” of the director on the extent of disclosures. This variable has not been explored in prior studies. The significance of the variable indicates that the number of directorships held impacts the efficiency with which a director performs his/her role in the board. The study reiterates the need for firms and policymakers to focus on improving board independence and to move away from leadership structures with duality.

Female directors and agency costs: evidence from Chinese listed firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qurat Ul Ain ◽  
Xianghui Yuan ◽  
Hafiz Mustansar Javaid ◽  
Muhammad Usman ◽  
Muhammad Haris
Keyword(s):  
Agency Costs ◽  
Conflicts Of Interest ◽  
Critical Mass ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Listed Firms ◽  
Female Directors ◽  
Wide Range ◽  
Board Gender Diversity

PurposeThe purpose of this research is to examine whether board gender diversity reduces the agency costs of firms in the context of Chinese listed firms.Design/methodology/approachThis paper uses a large sample of 23,340 firm-year observations of Chinese listed companies during 2004–2017. The authors use ordinary least squares regressions as the primary methodology with a wide range of methods to control for endogeneity and to check robustness, including the fixed-effect method, instrumental variable approach, lagged gender diversity measures, propensity score matching, Blau index, Shannon index and industry-adjusted measures of agency costs.FindingsThe evidence reveals that the participation of female directors in corporate board reduces agency costs, which correlates with conflicts of interest. Moreover, gender-diverse boards are more effective in state-owned enterprises (SOEs), in which agency issues are more severe. Female directors also provide better monitoring roles in more-developed areas. Finally, corporate boards that have a critical mass of female directors have a greater tendency to reduce agency costs as compared to their token participation. Overall, all findings support the validity of agency theory.Practical implicationsThis study shows the economic benefit of female directors in the boardroom by reducing agency costs and by improving firms' governance structure. Regarding the government, which is gradually introducing board gender diversity policies, this study provides valuable pragmatic information for Chinese regulators on this issue.Originality/valueThis study extends the literature by providing evidence that gender diversity in boardroom matters for shareholders' wealth maximization. It provides novel evidence that a critical mass of female directors is more effective in reducing agency costs compared to a single female on the board, and that the effect of gender diversity varies in relation to ownership structure and region.

Women on boards in India: a need or tokenism?

2018 ◽  
Vol 56 (8) ◽  
pp. 1769-1786 ◽  
Author(s):  
Varnita Srivastava ◽  
Niladri Das ◽  
Jamini Kanta Pattanayak
Keyword(s):  
Gender Diversity ◽  
Positive Association ◽  
Regulatory Reform ◽  
Corporate Boards ◽  
Content Type ◽  
Level Of Involvement ◽  
Female Directors ◽  
Women On Boards ◽  
The Right ◽  
The Impact

Purpose The purpose of this paper is to examine the significance of gender diversity on corporate boards in India in the light of recent regulatory reform introduced in the Companies’ Act, 2013 which mandated the presence of at least one woman on the corporate boards of all the listed firms. Design/methodology/approach Based on a panel of 300 firm-year observations for 15 years from 2001 to 2015, regression analysis has been conducted to analyze the relation between gender-related variables of corporate boards with firm-specific financial characteristic, cost of equity (COE) and return on assets (ROA) of firms listed in CNX Nifty, a major financial market index of India. Findings The analysis indicates that boards with gender diversity explain a slightly more than 5.5 percent change in a firm’s COE and have a much higher impact of 45 percent on a firm’s ROA. The presence of female directors on the boards and their independence have a negative association with the COE, whereas the level of involvement of female directors on different committees has a positive association with the ROA. Practical implications The findings may help theorists in defining the right mix of female on the corporate boards in an emerging economy. Also, by taking input from the findings, regulators and industry can formulate policies to foster gender diversity on corporate boards in India. Originality/value This study considers the recent regulatory norm introduced in India. This issue has still not been discussed and analyzed by researchers in India. It attempts to explain the impact a gender diverse board can make on a firm’s performance. It also makes valuable recommendations to improve the norms intended to more effectively foster gender diversity on corporate boards in India.

Board gender diversity and firms' internationalization speed: the role of female directors' characteristics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ge Ren ◽  
Ping Zeng
Keyword(s):  
Gender Diversity ◽  
Schema Theory ◽  
Manufacturing Firms ◽  
Economic Consequences ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Female Directors ◽  
Internationalization Speed ◽  
Board Gender Diversity ◽  
The Impact

PurposeDrawing on the gender self-schema theory, upper echelons theory and the literature on international business, this study aims to examine the impact of board gender diversity on firms' internationalization speed.Design/methodology/approachIn this study, secondary data of 886 listed Chinese manufacturing firms from 2009 to 2018 are studied using the ordinary least squares regression model as the baseline method, an instrumental variable method is adopted for endogeneity control and both fixed and random effect models are adopted for the robustness test.FindingsBoard gender diversity reduces firms' internationalization speed, and the negative effect between board gender diversity and internationalization speed is stronger when the average age of female directors is older and weaker when female directors have international experience or financial background.Practical implicationsFirst, Chinese firms need to increase or decrease board gender diversity to match the board to firms' internationalization strategy. Increasing board gender diversity may be a more appropriate choice for firms that are expanding rapidly internationally, and vice versa. Second, when introducing female directors to international firms, it is essential to address other characteristics of these directors beyond their gender.Originality/valueFirst, the authors contribute to the literature on board gender diversity using Chinese manufacturing firms as our research sample, which provides new insights into the economic consequences of increasing the number of female directors. Second, this research contributes to the literature on firms' internationalization speed. Third, the authors capture in more detail the economic consequences of increasing board gender diversity in the context of China.

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