scholarly journals Top managers’ compensation and governance in Spanish firms: Evidence and reflections

2011 ◽  
Vol 7 (1) ◽  
pp. 87-98
Author(s):  
Gregorio Sanchez-Marin
Keyword(s):  
Board Of Directors ◽  
Ownership Structure ◽  
Multiple Roles ◽  
High Concentration ◽  
Strong Stimulus ◽  
Listed Firms ◽  
Top Managers ◽  
The Board Of Directors ◽  
Conflicting Interests ◽  
High Level

In Spanish listed firms, taking into account the predominant modes of ownership structure, which are characterized by a high concentration of shares in the hands of a few shareholders who are strongly represented on the board of directors, it might suppose that there are strong stimulus for a close top managers’ supervision and a straight interest alignment. However, the empirical evidence indicates the opposite, and this paradox needs to be explained within the theoretical framework of institutional theory. The high concentration of ownership and the high level of cross-holdings generate conflicting interests by those who have multiple roles as directors and top managers, suggesting that board’s supervisory effectiveness may be compromised by social pressures in search of legitimacy. These features of Spanish firms are undermining governance mechanisms, and may explain the high pay levels, the low variable packages and, in general, the lack of connection between top managers’ compensation and firm performance in comparison with those in other countries of Continental Europe.

scholarly journals OWNERSHIP STRUCTURE AND BOARD EFFECTIVENESS AS DETERMINANTS OF TMT COMPENSATION IN SPANISH LISTED FIRMS / NUOSAVYBĖS FORMOS IR VALDYBOS EFEKTYVUMĄ LEMIANTYS VEIKSNIAI PASIRINKTOSE ISPANIJOS KOMPANIJOSE

2011 ◽  
Vol 12 (1) ◽  
pp. 92-109 ◽  
Author(s):  
Gregorio Sanchez-Marin ◽  
J. Samuel Baixauli-Soler ◽  
M. Encarnacion Lucas-Perez
Keyword(s):  
Panel Data ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Top Management Team ◽  
Management Team ◽  
Ownership Concentration ◽  
Board Effectiveness ◽  
Listed Firms ◽  
The Board Of Directors

This study analyzes the influence of ownership structure and the board of directors on top management team (TMT) pay levels in a sample of Spanish listed firms. When panel data methodology is applied, the results show that TMT pay level is affected by the supervisory effectiveness of the board. This, in turn, is influenced by ownership concentration and the type of major shareholders. When ownership is dispersed, the board is more effective in their supervision and TMT pay level is lower. However, when ownership is concentrated, the quality of supervision and, consequently, TMT pay levels depend upon the type of shareholder that is predominant. Santrauka Analizuojama nuosavybes formos strukturos ir valdybos itaka aukšèiausio lygio Ispanijos kompaniju vadovu darbo užmokesèio dydžiui. Tyrimu duomenys parode, kad aukšèiausio lygio vadovu darbo užmokesèio dydis priklauso nuo valdybos kontroles ir jos efektyvumo itakos. Tai, žinoma, yra susijê su kompanijos savininko ir pagrindiniu akcininku pozicija. Kai savininko pozicija pasyvi, tuomet valdybos veiksmai kontroles srityje yra efektyvesni, taèiau aukšèiausio lygio vadovu darbo užmokesèio lygis yra gerokai mažesnis. Taèiau kai savininkas tiesiogiai dalyvauja kompanijos veikloje ir prisideda prie jos valdymo, tuomet kontroles kokybe ir aukšèiausio lygio vadovu darbo užmokesèio lygis priklauso nuo akcininko pozicijos.

scholarly journals Implementing the board of directors’ mechanism – An empirical study of the listed firms in Libya

2018 ◽  
Vol 14 (1) ◽  
pp. 22-33 ◽  
Author(s):  
Jill Atkins ◽  
Mohamed Zakari ◽  
Ismail Elshahoubi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Boards Of Directors ◽  
Listed Companies ◽  
Board Members ◽  
Corporate Boards ◽  
Listed Firms ◽  
Stakeholder Groups ◽  
The Board Of Directors ◽  
Executive Managers

This paper aims to investigate the extent to which board of directors’ mechanism is implemented in Libyan listed companies. This includes a consideration of composition, duties and responsibilities of the board directors. This study employed a questionnaire survey to collect required data from four key stakeholder groups: Boards of Directors (BD), Executive Managers (EM), Regulators and External Auditors (RE) and Other Stakeholders (OS). The results of this study provided evidence that Libyan listed companies generally comply with the Libyan Corporate Governance Code (LCGC) requirements regarding the board composition: the findings assert that most boards have between three and eleven members, the majority of whom are non-executives and at least two or one-third of whom (whichever is greater) are independent. Moreover, the results indicate that general assemblies in Libyan listed companies are practically committed to the LCGC’s requirements regarding the appointment of board members and their length of tenure. The findings provide evidence that boards in Libyan listed companies are carrying out their duties and responsibilities in accordance with internal regulations and laws, as well as the stipulations of the LCGC (2007). Furthermore, the stakeholder groups were broadly satisfied that board members are devoting sufficient time and effort to discharge these duties and responsibilities properly. This study helps to enrich our understanding and knowledge of the current practice of corporate boards as a significant mechanism of corporate governance (CG) by being the first to address the board of directors’ mechanism in Libyan listed companies.

Corporate Governance and Risk Management on Listed Banks, The Tanzania Perspective

2021 ◽  
Vol 8 (1) ◽  
pp. 27
Author(s):  
Erick Lusekelo Mwambuli ◽  
Avitus Mwebembezi Dominick
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Management Practices ◽  
Stock Exchange ◽  
Management Approach ◽  
Financial Risks ◽  
The Board Of Directors

The study was to assess on corporate governance and risk management in Tanzania. The study was guided by three objectives which were to assess if transparency, disclosure and audit have significant effect on risk management of the firm, to assess if the board of directors have significant effect on risk management of the firm and evaluate if the ownership structure have significant effect on risk management of the firm. Furthermore, we assess how corporate governance and particularly board of directors, ownership structure, transparency disclosure and audit can affect risk management practices in the context of Dar es Salaam stock exchange listed banks. By the use of a content in analysis approach, the level of exposing the risks in terms of likelihood, consequences of such risk and the strategies used for managing that risk were identified for each kind of risk by using attributes. The results show that corporate governance is related to board of directors, ownership structure, transparency, disclosure and audit play a positive significant and crucial role in establishing an integrative risk management approach. The results from data collected demonstrate that corporate governance has positive significant effect in determining the the good quality of risk management through the level of risk-taking in decisions, especially in terms of financial risks management.

scholarly journals Board Independence and Earnings Management: Evidence from Italy

2020 ◽  
Vol 15 (8) ◽  
pp. 26
Author(s):  
Stella Lippolis ◽  
Francesco Grimaldi
Keyword(s):  
Earnings Management ◽  
Board Of Directors ◽  
Earnings Quality ◽  
Chief Executive ◽  
Board Independence ◽  
Governance Mechanism ◽  
High Concentration ◽  
Management Activity ◽  
The Board Of Directors ◽  
Italian Context

This research aims to analyze the relationship between the characteristics of the Board of Directors (BoD) and the effectiveness of the monitoring of earnings manipulation activities in family – controlled companies in Italy. In particular, specific hypotheses relating to the link between those aspects of the Board, that substantiate its independence, and earnings quality have been formulated to verify whether the mechanisms for monitoring management activity are less effective in these companies. This study applies a univariate and multivariate methods on a sample of Italian listed company over the period 2014-2016.  Earnings management is defined by the proxy of abnormal working capital accrual (AWCA) estimed model according to DeFond and Park (2001). Proxies for corporate governance mechanism are the board size, the level of board independence, the CEO non-duality and the interaction between the last two variables. The research shows that independent directors are not, as in other contexts, a factor that contributes to earnings quality, in the same way that the separation of the offices of Chairman of the Board of Directors and Chief executive Officer (CEO) does not appear to be relevant to this end. The study aims to provide a double contribution. First, the research represents one of the few studies concerning the Italian context with its peculiarities, taking into consideration the earnings management issue in companies with a high concentration of family ownership. Secondly, this study aims to further stimulate the debate on the most effective features of structure and composition of the BoD in family-controlled companies: specifically, the conclusions could lead to a reconsideration of the validity of certain characters of the boards that defines independence.

scholarly journals The effect of ownership structure, dividend policy, composition of the board of directors on financial performance and share return

Accounting ◽  
2022 ◽  
Vol 8 (1) ◽  
pp. 1-8
Author(s):  
Ida Bagus Anom Purbawangsa ◽  
Henny Rahyuda
Keyword(s):  
Financial Performance ◽  
Stock Returns ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Structural Equation ◽  
Manufacturing Industry ◽  
Dividend Policy ◽  
Partial Least Square ◽  
Least Square ◽  
The Board Of Directors

The purpose of this study is to examine and analyze the direct and indirect effects of the variable ownership structure, board composition, dividend policy, and financial performance and stock returns in the manufacturing industry on the Indonesia Stock Exchange. The population of this research is manufacturing industrial companies on the IDX since 2015 and was still active until 2019. The sample obtained is 92 issuers who continuously distribute dividends. Testing the research hypothesis, using the structural equation model (SEM) with the Partial Least Square (PLS) software approach. The results show that the ownership structure significantly affected the composition of the board of directors and dividend policy. Ownership structure has no significant effect on stock returns and financial performance. The composition of the board of directors has a significant effect on dividend policy and financial performance but has no significant effect on stock returns. Dividend policy has a significant effect on financial performance but has no significant effect on stock returns. Financial performance has no significant effect on stock returns.

scholarly journals Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

2021 ◽  
Vol 10 (2) ◽  
pp. 70
Author(s):  
Stephen A. Ojeka ◽  
Alex Adeboye ◽  
Olajide Dahunsi
Keyword(s):  
Risk Management ◽  
Board Of Directors ◽  
Audit Committee ◽  
Financial Risk ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Listed Firms ◽  
Enterprise Risk ◽  
The Board Of Directors ◽  
Accounting Expertise

There has been a huge and deluge of risk threatening industries at an unequalled magnitude in recent times. As such, the board of directors and senior executives are increasingly expected to manage their various organizations' risk portfolios, affecting their financial performance. This has led to the assigning of the risk assessment role to the audit committee. The board of directors and its audit committee play an essential function in Enterprise Risk Management (ERM) by building up the right condition or tone-at-the-top. Given the board's responsibilities for representing the interests of shareholders, it plays a vital role in overseeing management's approach to ERM. This study examined the relationship between audit committee characteristics and risk management of some selected listed firms in a developing country like Nigeria. The study used secondary data to describe the dependent variable (financial risk decomposed into credit risk and liquidity risk) and the explanatory variables (decomposed into audit committee accounting expertise, audit committee meetings, audit committee independence and audit committee gender). The study used pair sample t-test, student t-test, Pearson Moment Correlation and random panel data estimator for twenty (20) selected listed firms for 2012-2016. Findings indicate that there is a negative between audit committee accounting expertise and financial risk. This revealed that Accounting Expertise in Audit Committees are likely to involve in activities and practices to curb financial risk. In addition, the Audit committee meeting indicates a negative relationship with credit risk. Audit committee gender and audit committee independence have a negative effect on liquidity risk. Therefore, this study recommends that Audit committees embrace Enterprise Risk Management (ERM) to manage risks effectively across the organization. Risk management processes should be one of the major points of discussion during audit committee meetings.

scholarly journals Do Firm- and Board-specific Characteristics Corroborate Underpricing? A Study on the Indian IPOs

2019 ◽  
Vol 44 (1) ◽  
pp. 86-102
Author(s):  
Ramit Anand ◽  
Balwinder Singh
Keyword(s):  
Board Of Directors ◽  
Initial Public Offering ◽  
Ownership Structure ◽  
Emerging Market ◽  
Board Committees ◽  
Concentrated Ownership ◽  
Research Article ◽  
Time Period ◽  
The Board Of Directors ◽  
Public Offering

The present research article is an attempt to add something new and revalidate the influence of already existing corporate governance dimensions related to the board of directors on listing-day performance of the Indian initial public offering (IPO) firms measured through underpricing. Like other emerging market economies, firms in the Indian economy are also characterized by concentrated ownership held by an owner or a promoter in the context of the Indian corporate environment. In the backdrop of this concentrated complex ownership structure, the present study analyses the influence of the board of directors on underpricing when the appointment of such directors is largely an affair handled by such owners, whom they are given the task to monitor. The sample consists of 471 IPO firms which went public during the time period from January 2003 to December 2017. Results obtained from the regression analysis show that the board size and board committees act as information signals for Indian IPO firms having a significant and negative relation with listing-day initial excess returns. Other board-related dimensions of governance do not have significant influence on underpricing. Overall board variables have a very miniscule contribution in explaining the underpricing in Indian IPO firms.

scholarly journals Corporate governance and innovation: a theoretical review

2019 ◽  
Vol 28 (3) ◽  
pp. 266-284 ◽  
Author(s):  
Diego Asensio-López ◽  
Laura Cabeza-García ◽  
Nuria González-Álvarez
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Empirical Evidence ◽  
Ownership Structure ◽  
Theoretical Background ◽  
Future Research ◽  
Governance Mechanisms ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

Purpose The purpose of this paper is to present a review of the literature on two lines of research, corporate governance and innovation, explaining how different internal corporate governance mechanisms may be determinants of business innovation. Design/methodology/approach It explores the theoretical background and the empirical evidence regarding the influence of both ownership structure and the board of directors on company innovation. Then, conclusions are drawn and possible future research lines are presented. Findings No consensus was observed regarding the relation between corporate governance and innovation, with both positive and negative arguments being found, and with empirical evidence not always pointing in the same direction. Thus, new studies trying to clarify this relationship are needed. Originality/value Over recent years, interest has grown in the influence of governance mechanisms on innovation decisions taken by the management. Innovation efforts and results depend on factors that are influenced by corporate governance, such as ownership structure or the functioning of the board of directors. Thus, the paper shows an updated state of the art in this field proposing future lines for empirical research.

scholarly journals Does the board of directors affect cash holdings? A study of French listed firms

2013 ◽  
Vol 19 (2) ◽  
pp. 341-370 ◽  
Author(s):  
Sabri Boubaker ◽  
Imen Derouiche ◽  
Duc Khuong Nguyen
Keyword(s):  
Board Of Directors ◽  
Cash Holdings ◽  
Listed Firms ◽  
The Board Of Directors
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