scholarly journals Effectiveness of the board of directors in monitoring executive management: Preliminary evidence from Saudi Arabia

2019 ◽  
Vol 8 (3) ◽  
pp. 72-82
Author(s):  
Khalid Al-Adeem ◽  
Ibrahim Al-Sogair
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Data Collection ◽  
Board Of Directors ◽  
Capital Market ◽  
Preliminary Evidence ◽  
Executive Management ◽  
Effective Mechanism ◽  
The Board Of Directors ◽  
Research Findings

Elements of corporate governance must be activated at all scales for the efficient functioning of a nation’s capital market. The effectiveness of the board of directors depends on factors related to, for example, the composition of the board and its independence. This study aims to investigate empirically whether the board of directors is an effective mechanism for monitoring managers in Saudi Arabia through a survey. A questionnaire that was developed and employed by Elyas (2015) is utilized for data collection after modifying it and judging its appropriateness. We targeted individuals who had relevant experience as members of the board of directors as our respondents. Only 29 subjects took the survey. The results indicate that the respondents generally disagree with the survey items, pointing out the ineffectiveness of the board of directors in monitoring executive management. Although the subjects’ credible experience can be assumed, the generalizability of our research findings is limited because of the low number of respondents.

scholarly journals The Current Rights of Minority Shareholders in Saudi Arabia

2017 ◽  
Vol 6 (1) ◽  
pp. 185
Author(s):  
Khalid Saad Al-habshan
Keyword(s):  
Corporate Governance ◽  
Saudi Arabia ◽  
Board Of Directors ◽  
Legal Framework ◽  
Minority Shareholders ◽  
Shareholder Protection ◽  
Minority Shareholder Protection ◽  
The Board Of Directors ◽  
Standards And Regulations ◽  
Minority Shareholdings

The preceding articles examined the legal framework of corporate governance in Saudi Arabia and the important elements of the institutional framework for Saudi corporate governance. The discussion in this chapter first focuses on government and government-regulated institutions established to enforce compliance and see that the actions of corporations are in line with corporate governance law. This chapter then examines minority shareholdings interests and rights and investigates minority shareholder protection under the CL. In addition, the board of directors is described, which controls and guides firm operations in compliance with corporate governance standards and regulations.

scholarly journals The impact of the board of directors characteristics on regulation compliance: An evaluation of the board of directors’ effectiveness

2021 ◽  
Vol 10 (4) ◽  
pp. 93-103
Author(s):  
Ali A. Alnodel ◽  
Toseef Azid
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Capital Market ◽  
Power Distance ◽  
Ownership Concentration ◽  
Governance Practices ◽  
The Board Of Directors ◽  
Emerging Capital Markets ◽  
Regulation Compliance ◽  
The Impact

This paper aims to investigate the board of directors’ (BD) effectiveness in enhancing compliance with regulations in the Saudi context. In particular, it explores whether there is an impact of the board of directors (size, independence, frequency of meeting and CEO serving on board) on the value of fines imposed by the Saudi Capital Market Authority (CMA) during the period from 2010 to 2017. In total 728 year observations were collected and analyzed. Multiple linear regression is performed to examine the association between the value of fines imposed by CMA and companies’ board of directors attributes. The results show that the CEO is serving on board, and ownership concentration significantly impacts the value of the fines imposed by the CMA. These results suggest that power distance could influence the function and effectiveness of the board of directors in compliance with official regulations. This paper provides implications to regulators interested in fostering compliance with regulations in emerging capital markets. The findings can also help investors to enhance their corporate governance practices.

scholarly journals Composition of the board of directors and pay-performance sensitivity

2019 ◽  
Vol 30 (79) ◽  
pp. 28-41 ◽  
Author(s):  
Isac de Freitas Brandão ◽  
Alessandra Carvalho de Vasconcelos ◽  
Márcia Martins Mendes De Luca ◽  
Vicente Lima Crisóstomo
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Board Of Directors ◽  
Capital Market ◽  
Agency Conflicts ◽  
Governance Mechanism ◽  
Executive Board ◽  
Controlling Shareholder ◽  
Performance Sensitivity ◽  
The Board Of Directors

ABSTRACT This article investigates, in the Brazilian capital market, the effect of the composition of the board of directors on executive compensation sensitivity to market performance, known as pay-performance sensitivity (PPS). Due to potential agency conflicts between controlling and minority shareholders and between shareholders and managers, members of the board of directors of the executive board or those appointed by the controlling shareholder might have less independence, something which may compromise monitoring effectiveness and, consequently, reduce the PPS. The purpose is contributing to understand the agency conflicts that have taken place in the Brazilian capital market and to define the configuration of the monitoring and compensation mechanisms that minimize total agency costs, maximizing shareholders’ wealth. The research results have implications for understanding the agency relations and for corporate governance in the Brazilian capital market. It is concluded that the relation between the monitoring exercised by the board of directors and executive compensation is a condition for its effectiveness as a governance mechanism in the Brazilian capital market. Data within the period 2013-2015 from 92 companies that participate in the Brazil 100 Index (IBRX 100) of the São Paulo Stock, Mercantile & Futures Exchange (BM&FBOVESPA) were analyzed. In addition to tests of difference between mean values and correlation, estimates were processed through feasible generalized least squares modeling. The independence of the board of directors vis-à-vis the controlling shareholder and the executive board may work as a corporate governance mechanism supplementing executive compensation. The results of this study indicate that the proportion of executives and independent members in the board of directors reduces the PPS, a measurement for executive compensation effectiveness made operational by the contemporary relation between increased managers’ compensation and increased company’s market value.

Do characteristics of the board of directors and top executives have an effect on corporate performance among the financial sector? Evidence using stock

2019 ◽  
Vol 20 (1) ◽  
pp. 16-43 ◽  
Author(s):  
Ebrahim Mohammed Al-Matari
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Corporate Performance ◽  
Management Strategies ◽  
Future Research ◽  
Executive Management ◽  
Content Type ◽  
Listed Firms ◽  
The Board Of Directors ◽  
Top Executive

Purpose Consistent with the board of directors and top executive management’s role in ensuring and promoting investments for economic development, this paper aims to examine Omani executive management’s role in helping goals achievement in firms. This paper examines the relationships among the study variables, which are top executive management characteristics and corporate performance in the context of Omani listed firms, with the help of two control variables. Design/methodology/approach The study focused on a unique context, a developing nation, Oman and its exchange market for the past seven years (2011-2017). In addition, the data were collected from annual report according to board of directors and top executive management variables, and the financial data were obtained from DataStream. The study used the panel data approach to test the relationships characteristics of board of directors, top executive management and corporate performance. Findings Based on the obtained results, showed positive and significant positive relationships between some characteristics of top executive management and corporate performance, and significant negative relationships between others and the same. Specifically, board size, non-executive directors, general experience and account experience were in the former category, while board meeting was in the latter category. Finally, size and professional certificate of top executive management did not have a significant relationship with corporate performance. Research limitations/implications This study, like previous studies has some limitations such as sample, country, variables and years; therefore, at the end of this study, many limitations and suggestions for future research studies are provided. Moreover, the study findings can be used by the market to assist managers to enhance corporate weaknesses. Originality/value The focus of the study was placed on the top executive management and corporate governance of Omani listed firms that has implications for practitioners particularly concerning the top executive management role. Added to this, the study conducted an investigation of the integration between board of directors and top executive management, with corporate governance among Omani listed firms. The study also provided information that has implications to academics when it comes to board of directors and top executive management strategies to encourage consideration of the relationship to develop best practices.

scholarly journals Pengaruh Corporate Governnace Terhadap Kinerja Keuangan Pada Perusahaan Bumn (Persero) Di Indonesia

2013 ◽  
Vol 4 (2) ◽  
pp. 183
Author(s):  
Susi Handayani
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Financial Statements ◽  
Agency Conflicts ◽  
Ethical Aspects ◽  
Return On Assets ◽  
Effective Mechanism ◽  
The Board Of Directors

AbstractCorporate sustainability is characterized by an increase in the value of the company is reflected in the achievement of profit targets. One of the obstacles faced in achieving this goal is the conflict of interest between management and shareholders. Corporate Governance is an effective mechanism to minimize agency conflicts, with emphasis on legal and ethical aspects to encourage the growth of the company's performance. The purpose of this study is to empirically examine the effect of corporate governance on financial performance.This research is a quantitative study using a dependent variable corporate governance that is proxied by the meeting's activities the board of commissioners, the number of board of directors, the proportion of independent board, as well as the number of audit committee. Financial performance as the dependent variable is measured using the cash flow rate of return on assets (CFROA). CFROA calculated from earnings before interest and taxes plus depreciation divided by total assets. The sample used in this study were 12 BUMN that publish their financial statements during the period 2007-2012. The results showed that the activity of the board of commissioners meeting and audit committee size has no effect on financial performance. While the size of the board of directors and board size are independent has effect on financial performance.

Corporate governance, product market competition and firm performance: evidence from Iran

Humanomics ◽  
2017 ◽  
Vol 33 (1) ◽  
pp. 38-55 ◽  
Author(s):  
Mahdi Moradi ◽  
Mohammad Ali Bagherpour Velashani ◽  
Mahdi Omidfar
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Market Competition ◽  
Product Market ◽  
Research Literature ◽  
Product Market Competition ◽  
Governance Mechanisms ◽  
Management Performance ◽  
Content Type ◽  
The Board Of Directors

Purpose The purpose of this study is to investigate the effect of product market competition and corporate governance on firm’s management performance in the Tehran Stock Exchange market. According to the research literature, the governance mechanisms used in this study consist of ownership structure, structure of the board of directors and capital structure. In addition, Herfindahl–Hirschman Index and market size were used to measure the product market competition. Design/methodology/approach This study used one selected sample among the firms in the capital market of Iran from 2004 to 2012. Findings The results of this study indicated that there is a significant relation among the major governance mechanisms (including ownership concentration, independence of the board of directors and debt ratio) and product market competition and management performance. The findings of this study also showed that product market competition is effective on the relation between corporate governance and the performance, and this is what has been ignored in most of the conducted studies. Originality/value In general, the results of this study supported the idea that product market competition is effective on implementation and efficiency of governance mechanisms.

The Effect of Good Corporate Governance and Sustainability Report on Company Performance

2021 ◽  
Vol 12 (8) ◽  
pp. 494-504
Author(s):  
Jun aidi ◽  
Nurd iono ◽  
Ahmad Rifai ◽  
Icuk Rangga Bawano
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Linear Regression Analysis ◽  
Institutional Ownership ◽  
Company Performance ◽  
Good Corporate Governance ◽  
Management Ownership ◽  
The Board Of Directors ◽  
Sustainability Report

This study examines the effect of good corporate governance and sustainability report on company performance. Good corporate governance is dependent on the size of the board of directors, the proportion of independent commissioners, the size of the audit committee, institutional ownership, management ownership. Sustainability report is facilitated by economic, environmental and social aspect as well as disclosure index. While Company performance is generated by Return on Assets (ROA). This research was conducted on companies listed on the Indonesia Stock Exchange between 2014-2018. The purposive sampling technique was used. Hypothesis testing was done by linear regression analysis. The results of testing the first variable showed that institutional ownership affects ROA and has a negative relationship direction. While the size of the board of directors, the proportion of independent directors, the size of the audit committee, and management ownership have no effect on ROA. However, the result of the second variable showed that the disclosure of economic aspects affects ROA and has a positive relationship direction. While disclosure of environmental and social aspects does not affect ROA.

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