scholarly journals The Effect of Diversity in Board of Directors to Financial Performance: Evidence in Indonesia

2020 ◽  
Vol 7 (1) ◽  
pp. 76-84
Author(s):  
Yasmin Ridwan Putri ◽  
Dwi Nastiti Danarsari
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Empirical Result ◽  
Fixed Effect ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
The Board Of Directors ◽  
Conventional Banks

This paper aims to examine whether diversity in gender, nationality, and age in the board of directors of banks in Indonesia could affect the financial performance of those banks. We used conventional banks’ data in Indonesia in the year of 2014 to 2018 as a sample of this research. Based on the empirical result using fixed effect approach and the Generalized Methods of Moment (GMM) analysis, we find that diversity in gender in the board of directors does not affect the performance of banks in Indonesia. This could be the result of the little amount of female representative in the board of directors. In contrast diversity in age and diversity in nationality in the board of directors has an effect to the financial performance of banks in Indonesia. We used two measurement to represent financial performance in this study, which are measured by Tobin’s Q that represent measurement based on market and Return on Asset (ROA) that represent measurement based on accounting.

Female board participation and firm’s financial performance: a panel study from a Latin American economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pamela Leyva-Townsend ◽  
Wilson Rodriguez ◽  
Sandra Idrovo ◽  
Fredy Pulga
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Latin American ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Board Of Directors ◽  
Female Presence ◽  
The Relationship

Purpose This study aims to elucidate the relationship between women's participation on the board of directors and the company's financial performance in a sample of 45 Colombian companies listed on the Colombia Stock Exchange (CSE) (Bolsa de Valores de Colombia). Design/methodology/approach Using 50,214 financial records of 45 companies listed on the CSE during 2008–2016, the authors performed panel data regressions to explore the relationship between the measures of gender diversity on boards and the impact on corporate financial performance. Findings The authors show that the participation and presence of at least one woman on the board of directors are positively associated with firm financial performance as measured by return on equity (ROE), but not as measured by Tobin’s Q. This second indicator is positively associated with firm financial performance when there are at least three female directors on boards of 10 or more individuals. Practical implications The findings also provide evidence supporting the development of managerial and organizational mechanisms that strengthen female presence at the highest level of governance. Originality/value The study demonstrates that female presence on boards has a positive impact on firms’ financial performance, but the degree of diversity impacts differently ROE and Tobin’s Q. These findings are based on a study of an emerging economy in Latin America, and data on similar economies are scarce.

scholarly journals Impact of Cramel Model on the Financial Performance of Commercial Banks in Pakistan

2020 ◽  
Vol V (III) ◽  
pp. 67-77
Author(s):  
Syed Masood Shah ◽  
Muhammad Faizan Malik ◽  
Sikandar Shah
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Random Effect ◽  
Fixed Effect ◽  
Least Square ◽  
Capital Adequacy ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Firm Financial Performance ◽  
The Impact

This paper analyzes the impact of CRAMEL model on commercial banks financial performance working in Pakistan. Firm financial performance used as dependent variable e.g. ROA, ROE and TQ whereas Capital Adequacy, Resource Allocation, Asset Quality, Management Efficiency, Earning Profitability and Liquidity were used as independent variables. Panel data was analyzed through ordinary least square, fixed effect and random effect models. Secondary data of twenty listed commercial banks on Pakistan stock exchange are used from the period of 2008 to 2017. Result of fixed effect model provided significant positive relationship among CA, RA and ROA, ROE, whereas EP and LIQ have substantial negative association with ROA and ROE. There is insignificant relation of AQ and EP with ROA and ROE. Furthermore, EP has substantial positive association with Tobin's Q whereas RA, ME and LIQ has substantial negative relation with Tobin's Q. Lastly CA and AQ have insignificant impact on Tobin's Q.

scholarly journals Effect of board quality on the financial performance of conventional and Islamic banks in a stable financial context: Comparative study on the international evidence

2020 ◽  
Author(s):  
Achraf HADDAD ◽  
Anis EL AMMARI ◽  
Abdelfattah BOURI
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Positive Impact ◽  
Main Role ◽  
Islamic Banks ◽  
The Board Of Directors ◽  
Internal Mechanism ◽  
Conventional Banks ◽  
The Impact ◽  
Conventional And Islamic Banks

Abstract Returning to the literature of finance and banking governance, our article provides the first logical analysis that detailed the process of comparative analysis between the correlation of board determinants’ quality and the financial performance of conventional and Islamic banks. Previous research has always discussed the main role of the board as an internal mechanism of governance on the financial performance separately in each bank type. However, we have never encountered rewarding studies that compared these impacts. In our study, we distinguished between the impact of the board of directors on the financial performance in conventional and Islamic banks. Settings of the financial performance and board of directors of the conventional and Islamic banks are collected from 30 countries located in four continents: America, Europe, Asia, and Africa. Two equal samples were collected that each of them is composed of 112 banks. By using the GLS method, data were used to explore the impact of the board of directors on the financial performance between both types of banks over the period 2010-2018, giving us 1008 bank-year observations in each sub-sample. On the whole, empirical results have shown that in conventional banks the board of directors has negatively affected the financial performance, while the impact of the board on the financial performance of Islamic banks is ambiguous. Nevertheless, the degree of the positive impact on financial performance is more significant in Islamic banks.

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.

Women on Board and Firm Performance

2019 ◽  
pp. 312-335
Author(s):  
Haya Lori ◽  
Allam Mohammed Hamdan ◽  
Adel Sarea ◽  
Thaira Mohammed Al Shirawi
Keyword(s):  
Board Of Directors ◽  
Listed Companies ◽  
Annual Reports ◽  
Company Performance ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Measurement Models ◽  
Accounting Measurement ◽  
The Board Of Directors ◽  
The Relationship

This chapter aims to measure the relationship between the number of women in the board of directors and company performance in the listed companies in Bahrain Bourse. The study uses panel data where the data is collected from the investor's guide in Bahrain Bourse and the annual reports from the listed companies from 2013 to 2017. The sample of the study includes 39 listed companies; the independent variable is the number of women in the board of directors in each company, which was measured using dummy variables; and the dependent variable is the company performance, which was measured using two measurement models driven from previous studies: accounting measurement (return on assets) and market measurement (Tobin's Q). The study also utilizes three control variables in order to help measuring the relationship between the number of women in the board of directors and company performance. The study concludes that there is a positive correlation between the number of women in the board of directors and the company's ROA and Tobin's Q.

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).

scholarly journals Corporate governance and financial performance: An empirical study on Egyptian banks

2015 ◽  
Vol 13 (1) ◽  
pp. 1359-1374
Author(s):  
Hassan M. Hafez
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Banking Sector ◽  
Annual Reports ◽  
Obvious Effect ◽  
The Board Of Directors ◽  
Conventional Banks ◽  
The Impact

There is a distinct lack of research into the relationship between corporate governance and banks’ financial performance in the banking sector in Egypt. This research paper tries to fills this gab by examining the impact of corporate governance, with particular reference to the role of board of directors and ownership concentration, on the financial performance of Egyptian banks. Using a sample of 39 banks represent all commercial banks operate in Egypt for the period 2004– 2015 and controlling banks size and age. The study relied on the data through the annual reports of the respective banks, website of the central bank of Egypt and Data scope. The banks were selected for the study cutting across the local Islamic and Conventional banks, foreign Islamic and conventional banks, and regional Islamic and conventional banks. The results showed that banks ownership either foreign or national has an obvious effect on the banks’ financial performance. Board size has no significant effect. However, the hierarchy of the board of directors and the duality of the CEO has a direct effect on the banks financial performance in Egypt.

scholarly journals Effect of board quality on the financial performance of conventional and Islamic banks: Comparative study on the international evidence

2020 ◽  
Author(s):  
Achraf HADDAD ◽  
Anis EL AMMARI ◽  
Abdelfattah BOURI
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Positive Impact ◽  
Cylindrical Panel ◽  
Islamic Banks ◽  
International Evidence ◽  
The Board Of Directors ◽  
Conventional Banks ◽  
The Impact ◽  
Conventional And Islamic Banks

Abstract This article provides the first logical analysis that detailed the process of comparative analysis between the correlation of board determinants’ quality and the financial performance of conventional and Islamic banks. However, in previous research, we have never encountered rewarding studies that compared these impacts. In our study, we distinguished between the impact of the board of directors on the financial performance in conventional and Islamic banks. Settings of the financial performance and board of directors of the conventional and Islamic banks are collected from 30 countries located in four continents: America, Europe, Asia, and Africa. Two equal samples were collected that each of them is composed of 112 banks. By using the cylindrical panel method, data were used to explore the impact of the board of directors on the financial performance between both types of banks over the period 2010-2018, giving us 1008 bank-year observations in each sub-sample. On the whole, empirical results have shown that in conventional banks the board of directors has negatively affected the financial performance, while the impact of the board on the financial performance of Islamic banks is ambiguous. Nevertheless, the degree of the positive impact on financial performance is more significant in Islamic banks.

The effect of the board of directors on the performance: Case of Tunisian banks

2020 ◽  
Vol 2 (2) ◽  
pp. 8-17
Author(s):  
Abdelkader Derbali ◽  
Lamia Jamel ◽  
Ali Lamouchi ◽  
Ahmed K Elnagar ◽  
Monia Ben Ltaifa
Keyword(s):  
Financial Performance ◽  
Board Of Directors ◽  
Stock Exchange ◽  
Market Performance ◽  
Outside Directors ◽  
Return On Equity ◽  
Satisfactory Outcome ◽  
Stock Market Performance ◽  
The Board Of Directors ◽  
Negative Effect

The board of directors plays a crucial role as an internal structure of corporate governance. Certainly, its efficiency is needy on the existence of numerous issues; the greatest significance is correlated to its characteristics that relay principally to the individuality of its memberships, board dimension, combining the purposes of pronouncement and regulator as well the grade of the individuality of the audit board and the diverse gender of the committee. To assess the authenticity of our assumptions, which stipulate the presence of deterministic characteristics of the committee on the profitability of Tunisian banks, we evaluated by three different ratios i.e., ROA (return on asset), ROE (return on equity), and MP (market performance); and we estimate three models with linear regressions. The empirical findings were performed on a data sample composed of 11 Tunisian banks listed on the Stock Exchange of Tunisia (SET) during the period from 1999 to 2018. From the estimated regressions, we find a satisfactory outcome indicating the significance of the influence of the characteristics of the committee on the banking performance in Tunisia. Then, the percentage of outside directors negatively affects the level of the financial performance of banks. The number of institutional administrators performs an essential role in improving financial performance. Finally, the duality of the Presidency of the Council General-Directorate has a negative effect on the level of stock market performance of Tunisian banks.

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>

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