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 An Empirical Investigation on Corporate Governance: Evidence from Pakistan

2020 ◽  
Vol V (III) ◽  
pp. 154-161
Author(s):  
Ghulam Nabi ◽  
Faheem Ghaznafar ◽  
Tahira Asif
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Empirical Investigation ◽  
Stock Exchange ◽  
Annual Reports ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
The Board Of Directors

This study aims to examine the association between firm performance and ownership structure. We collect the data from the annual reports of 60 random firms, which are listed in the Karachi stock exchange (KSE 100 Index), for a period of 5 years from 2007-2011. Firm performance is measured by using market and accounting based proxies, Tobin's Q, ROA, and ROE, respectively, while ownership structure is measured as a percentage of shares held by the Board of Directors. The findings reveal that ownership structure has a negative and significant association with firm performance (accounting-based proxy).

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.

scholarly journals The Interaction Effect of Financial Leverage on the Relationship Between Board Attributes and Firm Performance; Evidence of Non-financial Listed Companies of Pakistan

2019 ◽  
Vol 5 (1) ◽  
pp. 115-122
Author(s):  
Sajjad Nawaz Khan ◽  
Muhammad Noman Yaseen ◽  
Fakhra Mustafa ◽  
Sidra Abbasi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Interaction Effect ◽  
Tobin’S Q ◽  
Outside Directors ◽  
Board Size ◽  
Tobin's Q ◽  
Corporate Scandals ◽  
Financial Firms ◽  
Sarbanes Oxley

The eminence of corporate governance (CG) was grasped after the major blunders incorporate strategies and distinct corporate scandals around the world during the global financial crises. Advanced countries have passed numerous laws such as “Say on Pay” or the Sarbanes-Oxley Act to shield the shareholder’s wealth. However, evolving countries are still flourishing to gain recognition in corporate governance (CG) effectiveness. The intention of the study is to probe the link between the CG (board size, outside directors) and firm performance (Tobin’s Q). Leverage has been used as an interaction term in the current study. The data had been collected from 130 non-financial firms from the year 2012 to 2015 and Multiple Regression Techniques will be used as the instruments for data analysis. The results indicate that the board size and Tobin’s Q have a significant association and outside directors’ insignificant association with Tobin’s Q. The interaction effect of leverage found a significant connotation between board size, outside directors, and 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 Corporate governance mechanisms and the performance of Malaysian listed firms

2016 ◽  
Vol 14 (1) ◽  
pp. 384-398 ◽  
Author(s):  
Shamsul Nahar Abdullah
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Chief Executive ◽  
Board Independence ◽  
Tobin’S Q ◽  
Women Directors ◽  
Board Size ◽  
Tobin's Q ◽  
Ceo Duality ◽  
Listed Firms

In the aftermath of the Asian Financial crisis in 1997/1998, the Malaysia Securities Commission (SC) issued the Malaysian Code on Corporate Governance in 2000 (MCCG 2000). It was subsequently revised in 2007 following the Enron and Transmile debacles. In 2012, the SC issued the latest MCCG 2012 which introduced several new recommendations that are in line with developments in other parts of the world. Hence, the purpose of this study is to investigate the influence of the structure of the board and its activities on firm performance post MCCG 2007. The study also aims to shed light on the effectiveness of the board of directors since the issuance of MCCG 2000 and of MCCG 2007. It also aims to reveal the preparedness of listed firms in Malaysia to embrace MCCG 2012. Using a population of non-finance listed firms for the 2009, 2010 and 2011 financial years, it was found that board independence, chief executive officer (CEO) duality, directors’ busyness, nomination committee independence, the establishment of a risk management committee (RMC) and board meetings are not associated with firm performance, i.e. Tobin’s q. However, the market appears to be in favour of a larger board size. As for return on assets (ROA), it is not associated with board independence, board size, directors’ busyness and nomination committee independence. On the other hand CEO duality and the establishment of a RMC improve ROA, while board meetings are detrimental to ROA. It can therefore be concluded that board independence is not associated with either Tobin’s q or ROA. Hence, any corporate governance reforms should not over-emphasize the representation of independent directors on the board, rather the focus might be shifted to board activities, such as board meetings and the establishment of a RMC. With regard to board size, since the market is in favour of a larger board size, firms should increase the board’s size to enable the appointment of women directors to the board. Finally, combining the CEO and board chairman roles should not be disallowed as the market views this favourably. Hence, the ‘one-hat approach’ does not appear to be applicable in the case of CEO duality.

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 Corporate governance and firm performance in the Saudi banking industry

2019 ◽  
Vol 14 (1) ◽  
pp. 147-158 ◽  
Author(s):  
Ahmed Almoneef ◽  
Durga Prasad Samontaray
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Audit Committee ◽  
Positive Relationship ◽  
Banking Industry ◽  
Negative Relationship ◽  
Tobin’S Q ◽  
Board Size ◽  
Tobin's Q ◽  
Governance Practices

The current research aims to explore the impact of corporate governance on the Saudi banking performance for the period of 2014–2017. Though many researchers tested the relationship of corporate governance and firm performance, globally as well as in Saudi Arabia, however, during the literature review, it was found that many excluded the banking industry. This study tries to fill the gap by looking exclusively at the Saudi banking industry. Firm performance is measured through return on assets, return on equity, and Tobin’s Q as the dependent variables. The corporate governance practices are measured through the board characteristics (size, meeting, number of committees, independence, foreign board membership), and an audit committee (size, meeting, independence) as the independent variables. Firm size and firm age are the controls. Panel data analysis was implemented, using both descriptive and multivariate analysis through multiple regression to investigate the governance practices and firm performance. The empirical findings demonstrate that board size, audit committee meeting and bank size have a positive impact on ROE, whereas board independence has a negative impact on ROE. Similarly, board size and bank size have a positive relationship with ROA and board meeting has a negative relationship with ROA. Further, board (size and independence) and bank size have a positive relationship with Tobin’s Q, whereas number of board committees and bank age have a negative relationship with Tobin’s Q. Finally, audit committee (size and independence) and foreign board membership have no impact on the bank performance.

scholarly journals Board Activities and Performance of Firms Listed at the Nairobi Securities Exchange

2018 ◽  
Vol 14 (28) ◽  
pp. 250
Author(s):  
Moses Odhiambo Aluoch ◽  
Erasmus S. Kaijage ◽  
Cyrus Iraya ◽  
Martin Ogutu
Keyword(s):  
Corporate Governance ◽  
Regression Analysis ◽  
Annual Reports ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Listed Firms ◽  
Common Mean ◽  
Board Committees ◽  
And Performance ◽  
Board Ownership

This study sought to examine the relationships among board activities and performance of firms listed at the Nairobi Securities Exchange. This study used a census approach and a target population of the study comprised of all companies listed at the Nairobi Securities Exchange between 2002 and 2016. A total of sixty five (65) companies were listed at the Nairobi Securities Exchange as at 31st December 2016. The data on board activities and performance of firms were extracted from annual reports of the individuals firms. This study employed longitudinal descriptive research design to determine relationships amongst board activities and performance of firms. A panel data regression analysis was conducted using random effects model which allowed the companies to have a common mean value of the intercept to determine whether corporate governance influence firm performance. An increasing trend was observed in other board activities variables such board ownership, board meetings, board tools, board committees and number of committees meetings. The study findings on the other hand revealed reducing trend in board tenure and board remuneration of listed firms Kenya. This was inferred to indicate that listed firms in Kenya have been strengthening their corporate governance over the study period. Regression analysis indicated that board activities are insignificant predators of Return on Assets, However board tenure, committees meetings and board remuneration were found to have a positive but insignificant effect on Tobin’s Q among listed firms in Kenya. Board ownership board tools, board meetings and number board committees were found to have negatively affected the performance measured by Tobin’s Q in listed firms in Kenya. However, only board tools significantly affected the performance measured by Tobin’s Q. The study concluded that listed firms in Kenya adopted corporate governance practices as part of the requirements of the regulating authority which had not impact on the specific company’s performance. Based on the findings of this study, stakeholders of listed firms and regulating authority such as Capital Markets Authority may relook at the board activities policies of listed firms with the view revising the existing policies or formulating new and more progressive policies to ensure shareholder interests are protected. These policies may go a long way to ensure listed firms not only strengthened their board activities during poor performing seasons but rather clear systems and activities that provide a clear roadmap to guide board operations.

scholarly journals The Relationship and Impact between Board of Director Criteria towards Firm Performance for Companies Listed on Bursa Malaysia: Trading and Services Sector

2017 ◽  
Vol 3 (1) ◽  
pp. 51-59
Author(s):  
Noorul Farha Mohd Jumali ◽  
Mohd Abdullah Jusoh ◽  
Syed Ismail Syed Mohamad
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Company Performance ◽  
Tobin’S Q ◽  
Governance Mechanism ◽  
Tobin's Q ◽  
Services Sector ◽  
The Board Of Directors ◽  
The Relationship

This research aims to investigate the relationship and impact between the board of directors criteria towards the company's performance. We hypothesized that the board of the directors criteria will increase the firm performance since board of the directors are viewed as one of the corporate governance mechanism that should be effective in monitoring and advice the management to protect the interest of shareholders. In this study, analysis of panel data has been used. The company's performance was measured by Return on Assets (ROA) and Tobin's Q. Using 159 listed firms in Trading and Services Sector from 2007 to 2013, our study exhibit that the size of the board of directors (BODSIZE) had significant and positive relationship on ROA and Tobin's Q. This shows when BODSIZE increases, the performance of the company will also increase. Next, CEO duality and independent board of directors (PERBODIND) had no significant relationship with ROA and Tobin's Q. Overall, good corporate governance is important to improve the company’s performance. The implication of this study is that it may affect various parties and include investors, financial institutions, academia, corporations, and governments in making judgments, decisions or improvements to corporate governance and company performance.

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