scholarly journals Board structure, D&O insurance and the variability of firm performance

2014 ◽  
Vol 12 (1) ◽  
pp. 259-270 ◽  
Author(s):  
Yuwei Wang ◽  
Chia-wei Chen
Keyword(s):  
Firm Performance ◽  
Stock Returns ◽  
Corporate Performance ◽  
Insurance Coverage ◽  
Liability Insurance ◽  
Board Structure ◽  
Tobin’S Q ◽  
Firm Risk ◽  
Tobin's Q ◽  
Percent Increase

We examine the relation between the disclosure of Directors’ & Officers’ (D&O) Liability insurance and the variability of firm performance. Our results show D&O insurance is positively correlated with the variability of firm performance. Specifically, the evidence shows a one percent increment in D&O insurance coverage will lead to a 0.31, 30, and 0.0008 percent increase in the variability of corporate performance measured in monthly stock returns, annual accounting returns on assets (ROA), and Tobin’s Q respectively. Therefore, instead of reducing risk, the findings of this paper suggest D&O insurance may actually increase firm risk, which is very different from the essential purpose of implementing this insurance

scholarly journals The Relationship between Extent of Internationalization and Firm Performance (Taiwan 1992–2017)

2021 ◽  
Vol 2021 ◽  
pp. 1-20
Author(s):  
Shih-Yung Wei ◽  
Li-Wei Lin
Keyword(s):  
Firm Performance ◽  
Operating Performance ◽  
Board Structure ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Moderating Variables ◽  
Average Operating ◽  
And Performance ◽  
And Control ◽  
The Impact

The purpose of this study was to discuss the impact of the extent of internationalization on firm performance measured for firms with a high Tobin’s Q (firms with good operating performance), a median Tobin’s Q (firms with average operating performance), and a low Tobin’s Q (firms with poor operating performance). In addition to discussion on the impact of internationalization on firm performance, this study also discussed the impact of corporate proprietary assets (using assets, R&D, marketing, and management-related variables as moderating variables) and control variables (scale of company, debt-asset ratio, firm age, board structure, and proportion of pledged shares by directors) on firm performance. The research results showed that there is an S-shaped relationship between extent of internationalization and firm performance. However, further discussion found that there is an S-shaped relationship between extent of internationalization and performance for firms with a high Tobin’s Q but a slight decline in the middle of the S-shaped curve, as well as a general linear negative correlation between extent of internationalization and performance for firms with a median Tobin’s Q and an inverted U-shaped correlation between extent of internationalization and performance for firms with a low Tobin’s Q.

Board characteristics and firm value for Indian companies

2018 ◽  
Vol 10 (1) ◽  
pp. 2-32 ◽  
Author(s):  
Rakesh Kumar Mishra ◽  
Sheeba Kapil
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Firm Performance ◽  
Firm Value ◽  
Corporate Performance ◽  
Strategic Decision ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Board Characteristics

Purpose This paper aims to explore the relationship between board characteristics and firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CNX 500 companies listed on National Stock Exchange have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on asset [ROA]). Findings The empirical findings indicate that the market-based measure (Tobin’s Q) is more impacted by corporate governance than the accounting-based measure (ROA). There is a significant positive association between board size and firm performance. Board independence is found significantly related to firm performance. Number of board meetings is found to be sending positive signal to the market creating firm value. Separation of chief executive officer and chairman of the board is found to be value-creating, and overburdened directors affect firm performance adversely. Research limitations/implications Limitations of the study are in terms of methodology and possible omission of some variables. It is understood that the qualitative dynamics happening inside board meetings impact corporate performance. The strategic decision-making process adopted by the boards to fight competition or to increase market share is not easily available in public domain. The decision-making processes and monitoring for implementation of those decisions could impact corporate governance performance relationship. These parameters and their impact on corporate performance are not covered under the scope of the present study. Originality/value The paper adds to the emerging body of literature on corporate governance performance relationship in the Indian context by using a reasonably wider and newer data set.

Effect of ownership structure and board structure on firm value: evidence from India

2017 ◽  
Vol 17 (4) ◽  
pp. 700-726 ◽  
Author(s):  
Rakesh Mishra ◽  
Sheeba Kapil
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Performance Measures ◽  
Board Structure ◽  
Tobin’S Q ◽  
Reverse Causality ◽  
Tobin's Q ◽  
Data Set ◽  
Content Type ◽  
The Relationship

Purpose This paper aims to explore the relationship of promoter ownership and board structure with firm performance for Indian companies. Design/methodology/approach Corporate governance structures of 391 Indian companies out of CRISIL NSE Index (CNX) 500 companies listed on national stock exchange (NSE) have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on assets [ROA]). Findings The empirical findings indicate that market-based measure (Tobin’s Q) is more impacted by corporate governance than accounting-based measure. There is significant positive association between promoter ownership and firm performance. It is also indicated that the relationship between promoter ownership and firm performance is different at different levels of promoter ownership. Board size is found to be positively related to ROA; however, board independence is not found to be related to any of the performance measures. Research limitations/implications Limitations of the study are in terms of data methodology and possible omission of some variables. It is felt that endogeneity and reverse causality might be better addressed using simultaneous equation methodology. Originality/value The paper adds to the emerging body of literature on corporate governance performance relationship in Indian context using a reasonably wider and newer data set.

scholarly journals Tobin’s q, RoA, Diversification and Risk

2015 ◽  
Vol 50 ◽  
pp. 146-154
Author(s):  
Banafsheh Farhangzadeh
Keyword(s):  
Firm Performance ◽  
Stock Returns ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
P Value ◽  
Tobin’S Q ◽  
Diversification Strategy ◽  
Tobin's Q ◽  
Significance Level ◽  
Percent Confidence Level

This study aims to explain the link between corporate diversification, firm performance and risk. To test the research hypotheses, a sample of 63 companies listed in Tehran Stock Exchange over the period 2008-2012 was taken. We construct two models with Tobin’s q, RoA, Size, Debt, Growth and Standard deviation of stock returns. Analysis of the research models is based on panel(data) analysis. In these models the presence or absence of effects models (fixed or random) is reviewed and finally the best model is estimated. Inference is based on significant level or p-value, thus likely that any value or significance level of the test is less than 0.05 is rejected at the 95 percent confidence level. The results indicate that there is no significant relationship between diversification strategy, firm performance and risk.

scholarly journals GENDER DIVERSITY ON BOARD AND ITS RELEVANCE TO FIRM PERFORMANCE: A STUDY ON PHARMACEUTICAL INDUSTRY OF BANGLADESH

2022 ◽  
pp. 1-15
Keyword(s):  
Firm Performance ◽  
Pharmaceutical Industry ◽  
Gender Diversity ◽  
Stock Exchanges ◽  
Board Structure ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Return On Equity ◽  
Size Firm ◽  
The Relationship

The study tries to examine the relationship between gender diversity on the Board and firms' profitability in Bangladesh's Pharmaceutical industry. The study employs a panel data approach with all the Pharmaceutical companies listed under Dhaka Stock Exchanges. The sample period covers eight years from 2012-2019. To conduct the study, Return on Equity and Tobin's Q was taken as a proxy of accounting measure of profitability and market measure of profitability, respectively. The proportion of women on board structure was taken as a proxy for gender diversity. Some other variables: board size, firm age, leverage, and firm size, were incorporated to control the effect of these variables on profitability. The study reveals that gender diversity shows a positive but insignificant relationship with the firm's performance in terms of ROE. The R square of this model was 11.67%. In terms of Tobin's Q, gender diversity exhibited a significant positive relationship with firm performance. The R square of this model was 17%. This implies that the market ascribes a great value to the inclusion of women in board structure since it increases the board structure's independence and profitability.

scholarly journals How does board structure impact on firm performance in the UK?

2019 ◽  
Vol 15 (2) ◽  
pp. 18-27 ◽  
Author(s):  
Ahmad Alqatan ◽  
Imad Chbib ◽  
Khaled Hussainey
Keyword(s):  
Firm Performance ◽  
Significant Negative Correlation ◽  
Board Structure ◽  
Tobin’S Q ◽  
Return On Assets ◽  
Board Size ◽  
Tobin's Q ◽  
Positive Correlation ◽  
Using Data ◽  
The Uk

The aim of this paper is to examine whether or not the structure of the board of directors and, in particular, board size, independence and remuneration have an impact on firm performance. The sample examined is UK FTSE 100 non-financial companies using data from the period 2012 to 2015. A regression analysis has been used concluding a significant positive correlation between board remuneration and firm performance, namely Return on Assets and Tobin’s Q. The study also concluded a positive correlation between board size and ROA, and between board independence and Tobin’s Q. Additionally, a significant negative correlation between the control variables (i.e. company size and industry) and Return on Assets.

scholarly journals The impact of board structure on the financial performance of listed South African companies

2013 ◽  
Vol 9 (3) ◽  
pp. 18-31 ◽  
Author(s):  
Erik Meyer ◽  
JHvH de Wet
Keyword(s):  
Firm Performance ◽  
South African ◽  
Board Structure ◽  
Tobin’S Q ◽  
Significant Positive Effect ◽  
Corporate Board ◽  
Tobin's Q ◽  
Enterprise Value ◽  
Earnings Per Share ◽  
Positive Effect

This study focuses on the role of the corporate board of directors and the relationship between the dynamics of board structure and the financial performance of listed South African companies. The research results found that the proportion of independent non-executive directors had a significant positive effect on firm performance as measured by earnings per share and enterprise value, but had no significant effect on Tobin’s Q ratio. Board ownership had a significant negative correlation with firm performance as measured by earnings per share, enterprise value and Tobin’s Q ratio. The number of directors serving on the corporate board had a significant positive effect on firm performance as measured by earnings per share, enterprise value and Tobin’s Q ratio. The study suggests that greater independent non-executive director representation, lower board share-ownership and larger board sizes should be encouraged to enhance firm performance.

scholarly journals Director remuneration, family ownership and firm performance: An analysis from Malaysian listed firm for period of 2005 till 2013

2017 ◽  
Vol 14 (2) ◽  
pp. 98-113 ◽  
Author(s):  
Nazrul Hisyam Ab Razak ◽  
Salmi Huwaina Palahuddin
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Returns ◽  
Family Firm ◽  
Annual Reports ◽  
Family Ownership ◽  
Future Market ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Accounting Measurement

This study examines the association between directors’ remuneration, corporate governance structures and firm performance of 140 Malaysian listed firms which 70 firms are family firm and 70 firms are non-family. Data has been collected through annual reports in Bursa Malaysia’s database from 2005 till 2013. The results show that firm performance is positively and significantly related to directors’ remuneration, firm’s growth and size measured by ROA, ROE and Tobin’s Q. However, firms’ performance in this study is not responsive to anticipated future market valuations in Stock returns. The study also finds that family ownership leads to lower performance than non-family owned firms on accounting measurement (ROA and ROE) and market measurement (Tobin’s Q ) after controlling company specific characteristics. The findings also reveal that role duality has no significant effect on accounting and market performance. Meanwhile the study explores that firm performance is negatively and significantly related to leverage. The findings can be useful to regulators to limit director’s influence over remuneration packages especially in family firm. The study also contributes to the growing literature on executive and directors’ remuneration and it provides international evidence on the effects of corporate governance reforms in recent years in influencing boardroom remuneration and ownership structure on a firm’s efficiency and performance.

scholarly journals The Influence of Founder Status on Firm Performance: Empirical Evidence from Canadian IPO Firms

2016 ◽  
Vol 8 (11) ◽  
pp. 134 ◽  
Author(s):  
Saif Ullah ◽  
Dan Zhang
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Firm Survival ◽  
Negative Influence ◽  
Performance Measure ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Survival Status ◽  
Income Stream

<p>This study compares performance for founder-managed firms and professional-managed firms by analyzing 138 Canadian IPO firms that went public from 2004 to 2013. In this paper, we measure firm performance in two ways: Tobin’s Q and ROA are used to measure a firm’s financial performance, while firm survival status is used as a supplementary performance measure. We find that founder-managed firms underperform and underlive their counterparts when firm performance is measured by Tobin’s Q and survival status. Founder status is proved to be unrelated to ROA. The negative influence of founder status can be explained by the relevant transaction hypothesis, which states that founder-managers may act for the controlling family and are more concerned with the associated private income stream than with maximizing the value of the firm.</p>

Impact of CEO Overconfidence on Firm Performance: An Evidence from S&P BSE 200

2019 ◽  
Vol 23 (3) ◽  
pp. 234-243
Author(s):  
Hardeep Singh Mundi ◽  
Parmjit Kaur
Keyword(s):  
Firm Performance ◽  
Superior Performance ◽  
Annual Reports ◽  
Tobin’S Q ◽  
Return On Assets ◽  
Tobin's Q ◽  
Full Sample ◽  
Forecasting Error ◽  
Research Article ◽  
The Impact

The current research article considers the impact of CEO overconfidence on firm performance for S&P BSE 200 firms. The CEO overconfidence is measured using revealed beliefs (holder 67, long holder and net buyer), press coverage and forecasting error proxies of CEO overconfidence. CEO Overconfidence measures are constructed as per the methodology of Malmendier and Tate (2005b, 2008). Firm performance is measured using Tobin’s Q and return on assets. The data are collected from the Centre for Monitoring Indian Economy (CMIE) prowess, S&P Capital IQ and the annual reports of the sample firms over a period of 15 years starting from 1 April 2000 to 31 March 2015. Regression results for each of the proxy of CEO overconfidence with the proxies of firm performance indicate that large Indian firms with overconfident CEOs enjoy a higher return on assets and Tobin’s Q as compared to the full sample firms. Overconfident CEOs consider themselves better-than-average, are involved with over-investment and show superior performance for the firm. The overconfident CEOs increase firm performance by following optimal levels of investments in the firm.

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