The Influence of Earnings Management and Board Characteristics on Company Efficiency

Earnings management is a means by which managers manipulate earnings to conceal the true performance of a company. The characteristics of the board of directors can also influence firm performance. This study applies data envelopment analysis (DEA) and the Tobin regression model to investigate the influence of earnings management and board characteristics on company efficiency. The data sample includes 396 Taiwanese electronics and biotechnology companies from 2009 to 2017. The results indicate that earnings management has an insignificant influence on company efficiency with mixed results on the interactions between earnings management and board characteristics. When companies practiced earnings management, director experiences, a higher proportion of female directors, and a higher number of board meetings increased company efficiency. In contrast, a higher number of independent directors and a higher attendance rate of the directors at the board meeting decreased company efficiency. The results of this study suggest that board diversity, more female directors, and meetings could still improve firm performance despite companies’ engagement in earnings management.

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Do Women Directors Improve Firm Performance and Risk in India?

Quarterly Journal of Finance ◽

10.1142/s2010139221500063 ◽

2020 ◽

pp. 2150006

Author(s):

Rwan El-Khatib ◽

Nishi Joy

Keyword(s):

Firm Performance ◽

Network Size ◽

Women Directors ◽

Board Diversity ◽

Public Companies ◽

Bankruptcy Risk ◽

Social Network Size ◽

The Board Of Directors ◽

Using Data ◽

Firm Bankruptcy

We examine board diversity in India following a 2013 law requiring all public companies to have at least one female board member. Our results indicate that having women on the board of directors improves firm performance and reduces firm bankruptcy risk. Using data on directors’ backgrounds and social connections, we find that important factors include female directors’ independence, social network size, committee memberships, and graduate education. Our results hold after addressing endogeneity using instrumental variable (IV) and difference-in-differences (DID) approaches.

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Editorial: Fundamental pillars of corporate governance research

Corporate Ownership and Control ◽

10.22495/cocv18i1sieditorial ◽

2020 ◽

Vol 18 (1, Special Issue) ◽

pp. 222-224

Author(s):

Paolo Tenuta ◽

Alexander Kostyuk

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Stock Market ◽

Earnings Management ◽

Board Of Directors ◽

Financial Reporting ◽

Corporate Ownership ◽

Special Issue ◽

The Board Of Directors ◽

And Control

Corporate governance is a system designed to improve corporate performance through supervision of management performance to ensure accountability to stakeholders based on a regulatory framework. Board of directors as a field of research becomes a major point for intersection of many other issues of corporate governance, such as financial reporting, firm performance, earnings management, stock market, and reaching even well-established fields of research such as accounting and finance. Most of the papers published in this issue (volume 18, issue 1, special issue) of the Corporate Ownership and Control journal are linked to the board of directors’ issues directly or indirectly.

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Analisis Pengaruh Karakteristik Dewan Terhadap Manajemen Laba

Gorontalo Accounting Journal ◽

10.32662/gaj.v4i2.1707 ◽

2021 ◽

Vol 4 (2) ◽

pp. 159

Author(s):

Sukiantono Tang ◽

Shandy Shandy

Keyword(s):

Earnings Management ◽

Board Of Directors ◽

Audit Committee ◽

Stock Exchange ◽

Sampling Technique ◽

Annual Reports ◽

Insurance Companies ◽

Time Dimension ◽

The Board Of Directors ◽

A Company

This study aims to examine the effect of the characteristics of the board of directors on earnings management. Board characteristics are the most important part in the structure or governance of a company and government in limiting or preventing earnings management by a company manager. This study uses data from companies listed on the Indonesia Stock Exchange (IDX) which include annual reports from 2015 to 2019 except insurance companies, financial and banking institutions. Sampling of data was done by purposive sampling technique. This study combined the research object and one time dimension. This research was conducted using panel data regression test based on data that had been collected using SPSS and Eviews 10 software. The best model chosen for this research model was the Fixed Effect Model. The results showed that the board independent, board meeting, board of directors expertise, size of the audit committee, independent audit committee, audit committee meeting, audit committee expertise, leverage and big4 has no influence on the dependent variable earnings management. Then the size of the board of directors has a negative significant on earnings management. Meanwhile, company size and growth have a positive significant on earnings management.

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The Effect of Board Diversity on Real Earnings Management: Empirical Evidence From Jordan

International Journal of Financial Research ◽

10.5430/ijfr.v10n5p495 ◽

2019 ◽

Vol 10 (5) ◽

pp. 495

Author(s):

Ahmad Almashaqbeh ◽

Hasnah Shaari ◽

Hijattulah Abdul-Jabbar

Keyword(s):

Earnings Management ◽

Stock Exchange ◽

Real Earnings Management ◽

Standard Errors ◽

Board Members ◽

Quantitative Methodology ◽

Board Diversity ◽

Age Diversity ◽

Amman Stock Exchange ◽

The Board Of Directors

This study considers the effect of foreign board members and age diversity on real earnings management (REM), by controlling the firm size, leverage and growth. This study employed quantitative methodology and longitudinal data for non-financial business firms, quoted on the Amman Stock Exchange from 2011 to 2015. Data were analysed using descriptive statistics and Panel Corrected Standard Errors (PCSE) regression. This study found that foreign boards member, age diversity, leverage and growth had negative and significant associations with REM. Based on the results, a firm should appoint young members to the board in addition to older members to pave the way to cross-ideology that can deter REM activities. At least one foreign director should exist within the board of directors because a foreign board member has different qualifications and experiences that may help to deter REM practices.

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The effect of the board diversity on firm performance: An empirical study on the UK

Corporate Ownership and Control ◽

10.22495/cocv18i3siart8 ◽

2021 ◽

Vol 18 (3, special issue) ◽

pp. 337-347

Author(s):

Rehab EmadEldeen ◽

Ahmed F. Elbayoumi ◽

Mohamed A. K. Basuony ◽

Ehab K. A. Mohamed

Keyword(s):

Firm Performance ◽

Stock Exchange ◽

Gender Diversity ◽

Cross Sectional ◽

Board Diversity ◽

Age Diversity ◽

The Board Of Directors ◽

Negative Effect ◽

The Uk ◽

Positive Effect

This study aims at filling existing research by examining the effect of board composition specially board diversity on firm performance using cross-sectional data from London Stock Exchange (FTSE 350) of non-financial companies with a total observations 3961 companies for the years 2000–2016. To the best of our knowledge, the contribution of this paper is to examine the effect of board diversity (age, gender, education, and nationality) of FTSE 100 and FTSE 250 on firm performance. Our results indicate that age diversity has a negative effect on firm performance, which means that young board members enhance and increase firm performance. Furthermore, education diversity has a negative effect on firm performance. On the other hand, gender diversity has positive effect on firm performance, so if companies increase the number of females in the board of directors, firm performance will increase. Ultimately, our result reveals that nationality diversity has a positive effect on firm performance.

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Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity

Journal of Management & Governance ◽

10.1007/s10997-014-9307-8 ◽

2015 ◽

Vol 20 (3) ◽

pp. 447-483 ◽

Cited By ~ 140

Author(s):

Siri Terjesen ◽

Eduardo Barbosa Couto ◽

Paulo Morais Francisco

Keyword(s):

Firm Performance ◽

Board Diversity ◽

Female Directors ◽

Country Study

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Analisis Hubungan Manajemen Laba dan Struktur Kepemilikan Terhadap Kinerja Perusahaan di BEI Tahun 2016-2019

Owner ◽

10.33395/owner.v5i2.496 ◽

2021 ◽

Vol 5 (2) ◽

pp. 653-662

Author(s):

Sari Dewi ◽

Lisa Lisa

Keyword(s):

Firm Performance ◽

Earnings Management ◽

Board Of Directors ◽

Ownership Structure ◽

Asset Management ◽

Stock Exchange ◽

Secondary Data ◽

Real Earnings Management ◽

The Board Of Directors ◽

Q Model

Firm performance includes the activities produced by company management and high firm performance can be said to allow them to plan their work according to their own goals and take risks with full responsibility. This study was conducted to determine the effect of earnings management, the size of the board of directors, and ownership structure (blockholders ownership, institutional ownership, family ownership, and managerial ownership) on the firm's performance. By using sample data listed on the Indonesia Stock Exchange (IDX) from 2016 to 2019. Because there are several previous studies that produce different values ?? on firm performance. Therefore, it is necessary to re-examine this. In this study using the firm's performance with Tobin's Q model to determine the value of asset management generated by the company. The data used is panel data with secondary data collection techniques to test outliers by SPSS software version 25, then test descriptive statistics, multicollinearity, heteroscedasticity, R Square, F test, and also t-test using Eviews software version 10. The results of this study conclude that both accrual-based and real earnings management have a significant positive effect on firm performance, while the size of the board of directors has a significant negative effect on performance. The ownership structure has no significant effect on the firm's performance. The result of insignificant results could be caused by not supporting the agency theory perspective, as well as the lack of company control.

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The association between board diversity, earnings management and firm performance in Kuwait: A research agenda

Corporate Governance: Search for the advanced practices ◽

10.22495/cpr19p14 ◽

2019 ◽

Author(s):

Ahmad Alqatan

Keyword(s):

Firm Performance ◽

Earnings Management ◽

Research Agenda ◽

Board Diversity

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The influence of the board of directors’ characteristics on firm performance: Evidence from Malaysian public listed companies

Corporate Governance and Sustainability Review ◽

10.22495/cgsrv2i1p1 ◽

2018 ◽

Vol 2 (1) ◽

pp. 6-13 ◽

Cited By ~ 15

Author(s):

Abdulkader Omer Abdulsamad ◽

Wan Fauziah Wan Yusoff ◽

Alhashmi Aboubaker Lasyoud

Keyword(s):

Firm Performance ◽

Boards Of Directors ◽

Listed Companies ◽

Independent Directors ◽

Return On Assets ◽

Board Characteristics ◽

Secondary Sources ◽

Panel Data Regression ◽

Data Regression ◽

The Board Of Directors

This paper aims to investigate the influence of board characteristics on firm performance. The four boards of directors’ characteristics that are of interest in this paper are: CEO duality, independent directors (ID), board size (BS) and board meeting (BM). Return on Assets (ROA) and Earnings per Share (EPS) are used as measurements for firm performance. Data were collected from secondary sources based on a purposively selected sample of 341 Malaysian Public Listed Companies throughout the period ranging from 2003 to 2013. The data were analyzed using the panel data regression model. Results of testing the influences between board characteristics and firm performance are found to be mixed. For example, board meetings showed weak and negative influences on firm performance while independent directors had weak and positive influences only on ROA. Based on the findings of this study, it has been observed that the present listing requirements, which aligned with the assumptions of agency theory, by the Malaysian Code on Corporate Governance (MCCG) and by the Bursa Malaysia requirements, might not be effective as expected in enhancing future firm performance.

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Women On Boards Of Directors: Effects On Firm Social Performance In The Basic Materials And Financial Services Sectors

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v22i1.1443 ◽

2011 ◽

Vol 22 (1) ◽

Author(s):

Mel E. Schnake ◽

Robert J. Williams ◽

William Fredenberger

Keyword(s):

Firm Performance ◽

Financial Services ◽

Boards Of Directors ◽

Social Performance ◽

Future Research ◽

Board Size ◽

Board Characteristics ◽

Female Directors ◽

Women On Boards ◽

The Impact

This study examined relationships between the number of female board members, board tenure, and board size on the number of 10K investigations that were instigated against  firms in the basic materials and financial services sectors of the economy.  After controlling for the effects of firm size, we found evidence of an interaction effect between the number of female directors and average board tenure for firms in the financial services sector, such that a higher number of women on boards coupled with longer average board tenure results in higher firm social performance (i.e., the fewer the number of 10K investigations brought against the firm).  No link was found between female directors and average board tenure for the basic materials firms.  Further, no interactive patterns were observed between female directors and board size in either sector.  Our findings suggest that future board research may benefit from a “contingency approach,” as this study has provided some evidence that the relationships between board characteristics and firm performance may not be generalizable from one sector to another.  Future research should carefully consider how the sector or industry may affect the impact of board characteristics on firm performance.

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