Effects of Agency Problems and Outside Monitors on the Participation of Female Directors on the Board of Directors

2021 ◽  
Vol 50 (6) ◽  
pp. 1535-1570
Author(s):  
Sang Cheol Lee ◽  
Yunkeun Lee ◽  
Chang Jin Moon
Keyword(s):  
Board Of Directors ◽  
Agency Problems ◽  
Female Directors ◽  
The Board Of Directors

The role of the gender diversity of audit committees in modelling the quality of management earnings forecasts of initial public offers in Malaysia

2017 ◽  
Vol 32 (6) ◽  
pp. 420-440 ◽  
Author(s):  
Mohammed Abdullah Ammer ◽  
Nurwati A. Ahmad-Zaluki
Keyword(s):  
Board Of Directors ◽  
Forecast Error ◽  
Gender Diversity ◽  
Earnings Forecasts ◽  
Audit Committees ◽  
Management Earnings Forecasts ◽  
Content Type ◽  
Female Directors ◽  
The Board Of Directors

Purpose Presently, one of the major governance issues faced by management and shareholders of organizations is the gender composition of the boards of directors and audit committees. This study aims to examine the impact of gender diversity in audit committees on the accuracy of management earnings forecasts disclosure in initial public offering (IPO) prospectuses. Design/methodology/approach The study sample comprises 190 Malaysian companies issuing IPOs that transformed into public companies during the period 2002-2012. Earnings forecasts accuracy (quality) is proxied by absolute forecast error and the study model is developed based on the frameworks of the signalling theory, the agency theory and the resource-dependence theory. Findings The study proposes that female directors introduce a set of specific features in the boardroom that serve to improve investor protection and efficient monitoring of management. However, findings reveal an insignificantly positive relationship between gender diversity in audit committees and absolute forecast error, which shows that more female directors in audit committees could translate into more errors and less accuracy in earnings forecasts. Practical implications Considering the recent regulatory developments that encourage the number of women on the board of directors, the findings obtained have significant implications for policymakers. The study findings can also be invaluable to investors, investment analysts, market players and researchers. Originality/value The composition of the board of directors and audit committees in terms of gender plays a significant role in the promotion of effective corporate governance practices. This study is one of the pioneering studies that examines the advantages of gender diversity in the board of directors. It is also the first study to extend IPO literature by investigating the role of gender diversity in audit committees in the enhancement of accurate management earnings forecasts included in the IPO prospectuses.

scholarly journals The effects of corporate governance on capital structure in Taiwanese corporations after controlling for the heterogeneity of industries and firm size

2008 ◽  
Vol 6 (Special Issue 1) ◽  
pp. 35-47
Author(s):  
Lie-Huey Wang ◽  
Hsien-Chang Kuo
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Board Of Directors ◽  
Cash Flow ◽  
Agency Problems ◽  
Voting Rights ◽  
Debt Financing ◽  
The Board Of Directors ◽  
Seat Control ◽  
Cash Flow Rights

Since the MM theory, scholars have discussed capital structure issues from the perspectives of agency problems in corporate governance. Corporate governance has been seen as the means to reducing the agency costs produced by aligning the interests of management and shareholders, and the incentive for the management to engage in opportunistic behavior has been influenced by the firm’s ownership and board of director structures. Previous studies, however, focus on traditional financial factors and neglect the debt and equity agency problems triggered by corporate governance and their possible influences on capital structure decisions. The sample used in this study consists of 317 firms listed on the Taiwan Stock Exchange from 1998 to 2007. By controlling for the heterogeneity of industries and firm size, our models incorporate the cash flow rights-voting rights-seat control divergence, the ownership structure, and the structure of the board of directors to examine the effects of corporate governance on the firm’s capital structure. The results show that, when the divergence between cash flow rights and seat control is lower or when the divergence between voting rights and seat control is higher, the controlling shareholders can either control the board of directors to better monitor the firm or exhibit a preference for debt financing based on entrenchment motives. Further analysis indicates that blockholders prefer lower debt financing and do not expropriate minority shareholders. Financial institutional shareholders function through their provision of monitoring and the certification of debt for technological firms and can decrease the firms’ debts. The management in the technological industry firms prefers debt financing in order to obtain agency-related benefits. While directors in traditional industries or large firms might use personal or firm debt to tunnel the firm’s assets, the function of independent directors in technological firms or large firms of lowering debts in order to reduce the firm’s bankruptcy risks is more evident.

Gender diversity on board of directors: comprehensive analysis of female directorate networks and the linkage between busyness and performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maryam Safari
Keyword(s):  
Social Capital ◽  
Board Of Directors ◽  
Gender Diversity ◽  
Diversity Management ◽  
Well Being ◽  
Data Set ◽  
Content Type ◽  
Multiple Directorships ◽  
Female Directors ◽  
The Board Of Directors

Purpose Drawing from social capital theory, this study aims to investigate the manifested critical barriers in deriving and implementing gender diversity policies, paying particular attention to the role multiple directorships play in shaping the directors’ behavior and the dynamic of the board of directors. The study comprehends social capital as a multi-dimensional concept and uses combinations of interconnected internal, external, expressive and instrumental networks. Design/methodology/approach The study uses a mixed-method approach through which the quantitative approach is supplemented by a qualitative research method to comprehensively examine the development and impact of female directors’ networks in Australia. To do so, a large data set consisting of 2,527 observations of all Australian firms and data emerged from semi-structured interviews with female directors were brought together and analyzed. Findings The findings reveal an inverted U-shaped relationship between the size of women’s directorate networks and firm performance. The study additionally explicates the key moderating factors influencing the optimal number of multiple directorships. The key power-based and psychological well-being-related benefits of the inter- and intra-organizational interactions and “open” directorate networks for individual directors are further discussed. The findings also elucidate the status quo vis-à-vis labyrinth metaphor and excessive numbers of directorships. Social implications The study should be of interest to those interested in effective gender diversity management. The findings would assist in enabling tangible outcomes for women through advanced processes and systematic investment in and institutionalization of well-structured, equitable opportunities provided via gender-responsive policies dedicated to the education and training of future female directors. Originality/value Calling for social dialogues and discussions on non-financial factors, this study adds to the scarce literature on influential factors related to diversity management policies and practices on the board of directors.

scholarly journals Research on the Relationship between the Female Directors' Personal Characteristics and the Quality of Accounting Information

2021 ◽  
Vol 96 ◽  
pp. 02008
Author(s):  
Lu Yin
Keyword(s):  
Board Of Directors ◽  
Accounting Information ◽  
Personal Characteristics ◽  
Quality Of Information ◽  
Female Directors ◽  
Quality Of Accounting Information ◽  
The Board Of Directors ◽  
The Relationship ◽  
Positive Effect

This paper explores the relationship between female directors and the quality of accounting information. it takes 51 enterprises from 2008 to 2018 as samples, selects the proportion of female directors, age, education background and financial background to study the personal characteristics. The results show that: the percentage of female directors is directly proportional to the accounting information; the higher the female director's education, the higher the quality of information; the female directors with financial background have a specific positive effect on the improvement of accounting information. Based on this, this paper proposes some suggestions on how to strengthen the construction of the board of directors and improve the quality of information about listed companies.

scholarly journals Changes in compensation structure, corporate governance, and short-run operating performance in IPO firms

2008 ◽  
Vol 5 (4) ◽  
pp. 328-344
Author(s):  
Amani Khaled Bouresli ◽  
Wallace N. Davidson III
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Operating Performance ◽  
Agency Problems ◽  
Venture Capitalist ◽  
Compensation Structure ◽  
Public Firm ◽  
The Board Of Directors ◽  
Short Run ◽  
And Performance

The IPO process may potentially introduce or increase agency costs. The newly public firm must deal with these agency problems. We find that following an IPO, the CEO compensation structure on average becomes more pay and performance-sensitive, and the board of directors becomes more independent. Venture capitalist participation seems to positively influence these findings. However, these post-IPO changes do not lead to better short-run operating performance

scholarly journals Retribución y composición del Consejo de Administración : evidencia empírica para las empresas cotizadas españolas

2009 ◽  
pp. 203 ◽  
Author(s):  
Elena Merino Madrid ◽  
Montserrat Manzaneque Lizano ◽  
Regino Banegas Ochovo
Keyword(s):  
Board Of Directors ◽  
Stock Exchange ◽  
Agency Problems ◽  
Chief Executive ◽  
Administrative Staff ◽  
Review Of The Literature ◽  
Composition And Structure ◽  
The Board Of Directors ◽  
The Empirical Analysis ◽  
Size And Structure

Este trabajo tiene como objetivo principal analizar las características de las empresas españolas cotizadas en el Mercado Continuo durante el ejercicio 2007, excluyendo las empresas financieras, en relación a la retribución, composición y estructura del Consejo de Administración, a fin de observar si éstas reúnen ciertas condiciones que inhiban o aviven los problemas de agencia entre accionistas y directivos. Para ello, en primer lugar, se ofrece una revisión de la literatura previa que versa sobre el conflicto de intereses entre propietarios y directivos en relación a la compensación y composición de los órganos de administración; en segundo lugar, se describe la metodología utilizada para el desarrollo del análisis empírico y se presentan los resultados del mismo; y, por último, se exponen las principales conclusiones.De tos resultado obtenidos se deduce que algunas de los aspectos de las empresas cotizadas españolas pueden redundar en la aparición de problemas de agencia entre directivos y accionistas, entre ellos: la dimensión y estructura de los sistemas retributivos, la falta de transparencia informativa al respecto de las retribuciones individuales de consejeros y la acumulación de poderes del presidente del Consejo de Administración y el primer ejecutivo.<br /><br />This paper mainly aims at analysing the characteristics of Spanish companies listed in the Stock Exchange during the year 2007, financial companies excluded, in relation to the remuneration, composition and structure of the Board of Directors, in order to see if the companies meet certain conditions that inhibit or intensify the agency problems among shareholders and managers. In order to do this, firstly, we provide a review of the literature which deals with the conflict of interests among owners and managers in relation to the composition and compensation of the administrative staff; secondly, we describe the methodology used to develop the empirical analysis and present the results of it. Finally, we discuss the main conclusions.From the results obtained we conclude that some of the characteristics of Spanish listed companies may produce agency problems among managers and shareholders, including the size and structure of the remuneration scheme, lack of transparency regarding individual remuneration of directors and the accumulation of power when the president of the Board of Directors and the chief executive officer are the same person.

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