scholarly journals Accounting Conservatism and Board Characteristics: Portuguese Evidence

2021 ◽  
Vol 22 (3) ◽  
pp. 1346-1362
Author(s):  
Sandra Alves
Keyword(s):  
Linear Relationship ◽  
Negative Relationship ◽  
Accounting Conservatism ◽  
Securities Market ◽  
Board Composition ◽  
Board Structure ◽  
Board Meeting ◽  
Board Size ◽  
Board Characteristics ◽  
Non Linear

For a sample of 26 non-financial listed Portuguese firms-year from 2002 to 2016, this study extends previous research by empirically examining how board structure affects the magnitude of accounting conservatism for companies listed in Portugal. Mainly, we focus on the main characteristics of the board structure that are highlighted by the Portuguese Securities Market Supervisory Authority’s recommendations: board size, board composition, board’s monitoring committees and number of board meeting. This study predicts and finds a non-linear relationship between board size and conservatism. Specifically, we find that as board size increases up to 8 members, the sample firms employ more conservatism, consistent with the idea that smaller boards can be more effective than larger boards in monitoring managerial behaviour. When board size reaches beyond 8 members, a negative relationship between board size and conservatism accounting occurs. We also find that both boards comprised of more non-executive members and high board meetings frequency lead firms to report more conservatively.

scholarly journals Board Characteristics and Firm Performance: Case of Saudi Arabia

2012 ◽  
Vol 2 (2) ◽  
pp. 168 ◽  
Author(s):  
Mohammad Ahid Ghabayen
Keyword(s):  
Firm Performance ◽  
Audit Committee ◽  
Negative Relationship ◽  
Study Data ◽  
Annual Reports ◽  
Board Composition ◽  
Board Size ◽  
Board Characteristics ◽  
The World ◽  
The Relationship

ABSTRACTCorporate governance (CG) has received much attention in the current studies all over the world especially after many corporate scandals and the failures of some biggest firms around the world such as Commerce Bank (1991) Enron (2001), Adelphia (2002), and World Com (2002).The aim of this study is to examine the relationship between board mechanisms (audit committee size, audit committee composition, board size, and board composition) and firm performance (ROA) based on the annual reports of listed companies in the year 2011 of  sample of non-financial firms in the Saudi Market (Tadawul). For the purpose of this study, data was collected from a sample of 102 non-financial listed companies.Furthermore, an analysis of regression analysis is utilized to examine the relationship between board characteristics and firm performance. The results of this study reveal that audit committee size, audit committee composition and board size have no effect on firm performance in the selected sample while board composition has a significant negative relationship with firm performance.

scholarly journals MODERATING EFFECT OF FINANCIAL PERFORMANCE ON THE RELATIONSHIP BETWEEN BOARD CHARACTERISTICS AND DIVIDEND POLICY OF LISTED NON-FINANCIAL FIRMS IN NIGERIA

2021 ◽  
Vol 8 (1) ◽  
pp. 34-48
Author(s):  
Alawiyya Ilu ◽  
◽  
Yunusa Ibrahim ◽  
Binta Nuhu ◽  
◽  
...  
Keyword(s):  
Financial Performance ◽  
Dividend Policy ◽  
Moderating Effect ◽  
Policy Implications ◽  
Board Composition ◽  
Board Size ◽  
Board Diversity ◽  
Board Characteristics ◽  
Financial Firms ◽  
The Relationship

The study analyses the moderating effect of financial performance on the relationship between board characteristics and dividend policy of listed non-financial firms in Nigeria. Board characteristics is proxied by board composition, board size, and board diversity, while dividend policy is proxied by dividend pay-out ratio. The positivist research paradigm and correlational research design were used. Relevant data for the study were collected from 39 sampled non-financial firms actively trading on the floor of the Nigerian stock exchange (NSE) from 2008 to 2017; the data collected were analysed using the panel corrected standard error (PCSE) regression analysis. The findings reveal that board composition and board diversity have positive but insignificant effect on dividend pay-out ratio of non-financial firms before moderation, While, board size has positive and significant effect on dividend policy of listed non-financial firms before moderation. The study also found that financial performance moderate the relationship between board characteristics and dividend pay-out ratio of listed non-financial firms. Based on the findings, the study concludes that board composition and board size are related with high dividend payment. Among the important policy implications is that the variable of board size used suggest that there is the need by SEC to monitor the available cash at the discretion of managers since financial performance can moderate the relationship between board size and dividend pay-out ratio in order to mitigate agency conflict between management and shareholders of listed non-financial firms which is in-line with the practical problem of the study. It is therefore recommended amongst others that the government through the regulators should provide an enabling environment for non-financial firms to make a profit and pay more dividends to their shareholders since the interaction effect of financial performance makes the variables of the study to be more active in influencing the dividend pay-out ratio of non-financial firms in Nigeria.

scholarly journals BOARD STRUCTURE AND BANK PERFORMANCE: EVIDENCE FROM SERBIAN BANKING SECTOR

2020 ◽  
pp. 057
Author(s):  
Verica Babić ◽  
Jelena Nikolić ◽  
Marijana Simić
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Bank Performance ◽  
Board Composition ◽  
Board Structure ◽  
Governance Mechanism ◽  
Board Size ◽  
Data Set ◽  
Corporate Governance Mechanism ◽  
The Impact

Traditional perspective relying on agency theory is based on the assumption that the board structure, as an internal corporate governance mechanism, determines board effectiveness and, therefore, financial performance. Board size, board composition and leadership structure are distinguished as relevant variables of the board structure. Since the results of previous empirical studies are often contradictory, examining the correlation between board structural characteristics and corporate performance is a relevant research question, particularly in banking sector. In order to improve effectiveness of internal corporate governance mechanism, and consequently bank performance, the main research objective is to identify the impact of the board size and the board composition on bank performance in the Republic of Serbia using the CAMELS model. We analyze this relation using Ordinary Least Squares regression analysis on balanced panel data-set of 54 observations. The paper contributes to recent research efforts by making conclusions on the effects of board structure on bank performance, in order to define recommendations for improving performance in banking sector. 

scholarly journals Mimetic isomorphism in the governance of IPO companies in Italy

2010 ◽  
Vol 8 (1) ◽  
pp. 117-122
Author(s):  
Alberto Barbesta ◽  
Giancarlo Giudici ◽  
Stefano Lugo
Keyword(s):  
Multivariate Analyses ◽  
Board Composition ◽  
Information Asymmetries ◽  
Board Size ◽  
Listed Firms ◽  
Board Characteristics ◽  
Mimetic Isomorphism

In order to comply with listing requirements and overcome information asymmetries, listing companies may be encouraged to adapt themselves with market standards („isomorphism‟) in the setting of governance devices in order to reduce the perceived uncertainty and obtain legitimacy towards investors. In this work we evaluate the isomorphism of IPO companies with respect to the board characteristics (i.e. board size and members‟ age). By analyzing a sample of 121 companies listed from 1999 to 2008 on the Italian Exchange, we find that mimetic strategies are frequent in IPO companies, and that the majority of them exhibit a reduction in the differences of board characteristics in the year after the flotation, compared to listed firms in the same sector. The percentage of mimicking companies is even larger if we consider only companies that introduce changes in the board composition. Multivariate analyses suggest that isomorphism strategies are targeted to signal the IPO firm‟s quality, and are an alternative to issuing underpriced shares.

scholarly journals The relationship between board size, board composition, CEO duality and firm performance: Experience from Ghana

2007 ◽  
Vol 4 (2) ◽  
pp. 114-122 ◽  
Author(s):  
Anthony Kyereboah-Coleman ◽  
Nicholas Biekpe
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Agency Cost ◽  
Board Composition ◽  
Board Structure ◽  
Board Size ◽  
Clear Separation ◽  
Listed Firms ◽  
Data Framework ◽  
The Relationship

The paper examined board characteristics and its impact on the performance of non-financial listed firms in Ghana. Data covering 11 year period (1990-2001) was used and analysis conducted within the panel data framework. The study shows that most Ghanaian firms adopt the two-tier board structure and are largely non-independent. The regression results, though relatively mixed, confirm other studies and show that there should be a clear separation of the two critical positions of CEO and board chairman in order to reduce agency cost for enhanced firm performance.

Non-linear relationship of board size and board independence with firm performance – evidence from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Srikanth Potharla ◽  
Balachandram Amirishetty
Keyword(s):  
Financial Performance ◽  
Linear Relationship ◽  
Fixed Effects ◽  
Board Independence ◽  
Tobin’S Q ◽  
Board Size ◽  
Tobin's Q ◽  
Content Type ◽  
Non Linear ◽  
Relationship Of

Purpose This study aims to examine the significance of the non-linear relationship of board size and board independence on the financial performance of listed non-financial firms in India. Design/methodology/approach The study draws the sample of the listed non-financial firm in the Indian market from the year 2011–2018 and applied panel least squares regression with and without industry fixed effects on the model with quadratic equation. Quantile regression is also used to test the robustness of the results. The financial performance is measured through one accounting measure (i.e. return on assets [ROA]) and one market-based measure (i.e. Tobin’s Q). The empirical model also controls firm-specific variables which are expected to have an impact on financial performance. Findings The study found that the relationship of board size and board independence with the financial performance of a firm is in a non-linear inverted U-shape. The results are qualitatively similar for both ROA and Tobin’s Q after controlling industry fixed effects. Originality/value This is the first study in India which tests the non-linear relationship of board size and board independence with the financial performance of the firm. The study contributes to the limited literature on the implications of board characteristics on the performance of the firms in India.

scholarly journals Determinants of corporate financial performance relating to board characteristics of corporate governance in Indian manufacturing industry

2017 ◽  
Vol 26 (1) ◽  
pp. 67-85 ◽  
Author(s):  
G. Palaniappan
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Manufacturing Industry ◽  
Academic Research ◽  
Negative Relationship ◽  
Multiple Regression Model ◽  
Inverse Association ◽  
Board Size ◽  
Content Type ◽  
Board Characteristics

Purpose The purpose of this paper is to examine if certain board characteristics have an impact on the financial performance of manufacturing firms in India. Design/methodology/approach The study draws on data from 275 firms listed in NSE during from 2011 to 2015, using a multiple regression model. The present study examines the effect of board characteristics such as board size, CEO duality, independence and board activity devoted to the effectiveness of firms performance regarding market and accounting based financial performance measures. Findings The finding supports an inverse association between the extent of board characteristics and the firms’ performance indicators. The study also finds a statistically significant negative relationship between board size and Tobins Q, ROA and ROE. The evidence also shows that the board independence and meeting frequency moderate the relationship between return on equity and return on assets by enhancing these measures among corporate governance mechanisms. Research limitations/implications The present study does not include all possible board characteristics, i.e., large shareholders dominance on the board and promoter’s and institutional shareholding, to support firm’s performance. Further research might include the ownership structure of the board to improve firm’s performance. Originality/value The study focuses on the corporate governance issues such as size, duality, independence and activity of the boards and their influence on firm performance. The subject analyzes the possible impact of board characteristics and firm-related features that have received much attention from academic research, which has largely focused on studying the publications of corporate governance in India and Asian context.

Family firms, board structure and firm performance: evidence from top Indian firms

2017 ◽  
Vol 59 (5) ◽  
pp. 699-717 ◽  
Author(s):  
R. Rathish Bhatt ◽  
Sujoy Bhattacharya
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Independent Directors ◽  
Family Management ◽  
Family Ownership ◽  
Board Structure ◽  
Board Size ◽  
Content Type ◽  
Board Characteristics ◽  
The Relationship

Purpose Given the prevalence of family-run businesses in India, this paper aims to empirically investigate the impact of family firms on the relationship between firm performance and board characteristics. The effectiveness of board characteristics such as independent directors, chairman independence, role duality, non-executive directors, board busyness, board size, board meetings and board attendance are studied in the Indian context. Design/methodology/approach The sample consists of top-listed firms in India for the period 2002 to 2012. Board index was constructed to capture the governance quality of the firm. The authors also study the relationship between board structure and firm performance by segregating the sample based on family management, family ownership and family representative directors. Random effects model was used for the regression analysis in the study. Findings The authors find a negative effect of board structure on firm performance in family firms compared to non-family firms. Contrary to the most Western literature, family management was not found to significantly affect firm performance as compared to that of professionally managed firms. In the subset analysis of family firms, higher proportion of family ownership and family representative directors did not show any significant impact on the firm performance. Having a higher proportion of independent directors, larger board size or an independent chairman does not appear to improve this insignificant relationship between family firms and firm performance. Also, in family firms, no significant difference in performance is noticed before and during recession period. Originality/value The study uses a self-defined corporate governance index to measure the governance parameters, specifically the board characteristics. The results documented in this study adds to the debate on the generalizability of the findings in Western governance studies in emerging markets like India with unique institutional development background.

scholarly journals The impact of board of directors’ characteristics on dividend policy: Evidence from a developing country

2021 ◽  
Vol 5 (2) ◽  
pp. 44-56
Author(s):  
Kasun Tharaka Dissanayake ◽  
Hareendra Dissabandara
Keyword(s):  
Positive Relationship ◽  
Dividend Policy ◽  
Negative Relationship ◽  
Board Size ◽  
Dividend Payment ◽  
Significant Positive Relationship ◽  
Board Characteristics ◽  
Sectorial Analysis ◽  
Women On Boards ◽  
The Impact

The “dividend puzzle” has been an unresolved problem since the 1950s. The purpose of this paper is to investigate the nature and a level of the relationship between board characteristics dividend policy. The study used a positivistic approach and Spearman correlation metric, descriptive statistics, and binary regression models have been deployed as analytical tools. It is found that food and beverages sector had the highest percentage for dividend payout from 2015 to 2019. The highest percentage for women on boards was 13% in the land and property sector. The average board size for the selected companies was 8. The likelihood to pay dividends, women on boards, the board size, and CEO duality indicated a significant positive relationship. Panel regression results indicate that there is no significant relationship between board characteristics and the level of dividend payment for the selected sample. But in a sectorial analysis audit committee size has a significant negative relationship with the level of dividend payment in the manufacturing sector whereas board gender diversity has a significant positive relationship with the same in the food and beverage sector. In summary, dividend decision has been affected by several board characteristics, but such factors had no significant impact on the level of dividends declared in the market. The sectorial analysis revealed that several characteristics affected the level of dividends in two sectors

scholarly journals IMPACT OF MANAGERIAL ENTRENCHMENT AND GROUP AFFILIATION ON DIVIDEND POLICY IN EMERGING ECONOMY OF PAKISTAN EMPIRICAL EVIDENCE FROM KSE LISTED NON-FINANCIAL FIRMS

2017 ◽  
Vol 5 (1) ◽  
pp. 11-22
Author(s):  
Muhammad Anjum Fareed ◽  
Arshad Hassan
Keyword(s):  
Linear Relationship ◽  
Dividend Policy ◽  
Random Effect ◽  
Random Effect Model ◽  
Negative Relationship ◽  
Group Affiliation ◽  
Managerial Entrenchment ◽  
Non Linear ◽  
High Level ◽  
The Impact

For analysis of managerial entrenchment hypothesis, insider’s ownership (MSO) is divided into three parts, i.e., MSO less than 25%, between 25% and 50% and above 50%. For data analysis Random effect model and Tobit model are used. Many studies have shown the linear relationship among managerial ownership and firm’s performance but a very few studies documented a non linear relationship in literature (Farinha, 2002; Chen et al., 2005). The study presented a non linear relationship between insiders’ ownership and dividend policy, i.e. at low level (MSO< 25%) a negative relationship exists which proves the agency theory hypothesis, whereas above this level (MSO>25%) a significant positive relationship is documented which is backed by the managerial entrenchment hypothesis, as at high level of MSO “resource extraction” and above 50% level “expropriation of minority rights” exist. Group affiliation (ASSO) is also included to see the impact on dividend policy and results reveal a significant negative relation between group affiliation and dividend policy.

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