The Effect of Board Characteristics on Real Activities Manipulation in Tunisian Banks

The succession of financial scandals and resounding bank failures that characterized the economic environment over the past three decades have given more weight to governance mechanisms. As such, considered to be one of the most important internal governance mechanisms, the board of directors has shown its strengths in controlling earnings manipulation, in particular those linked to real activities. The aim of this paper is to examine the effect of board characteristics on real earnings management. Using panel data econometrics, on all Tunisian commercial banks over the period 2008-2019, we show that board gender diversity has a disciplinary role in real earnings management as measured by discretionary revenue on equity securities. However, we show that board independence increases the real earnings management. As for board size, board duality, as well as the number of meetings carried out per year by the board of directors, we prove that they have no significant effect on real earnings management.

The Role of Ownership Structure and Board Characteristics in Stock Market Liquidity

Corporate governance plays a significant role in the value of shareholders and share prices, hence stock market liquidity is affected. Previous research has mainly focused on the issue in developed markets, whereas in developing countries there is a need to analyze the influence of corporate governance on stock market liquidity. Therefore, the present study aims to examine the impact of ownership structure and board characteristics on stock market liquidity of non-financial firms of South Asian countries such as Pakistan, Sri Lanka, Bangladesh, and India. The data in the study is collected from the DataStream for the 2011–2020 period. The study uses a fixed effect model for the analysis of the data and hypotheses testing and generalized method of moments (GMM) is used to check the robustness of the results. The findings of the study indicate that institutional ownership, board size, board independence, and CEO duality have a significant and positive impact on stock market liquidity, whereas managerial ownership has a significant and negative effect on stock market liquidity.

Accounting Conservatism and Board Characteristics: Portuguese Evidence

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.

Board Characteristics and Financial Performance of Government-Owned Sugar Manufacturing Companies in Kenya

The board of directors is tasked with the obligation and the responsibility of administering changes and operations that support the mission of the organization to realize its vision. Kenya in the recent past, has witnessed a number of organizations listed in the NSE collapsing with the board of directors taking the blame. Specifically, the study sought to establish the association between; board diversity, board independence, board size and financial performance of government-owned sugar manufacturing companies in Kenya. The study sought to determine whether firm attributes have a moderating impact on the relationship between board characteristics and financial results of Kenyan government-owned sugar manufacturing companies. The study adopted the Agency Theory and Stewardship Theory. The study targeted the Government-Owned Sugar manufacturing companies in Kenya during the years 2000 to 2016 when the companies were operational. The study used secondary data where panel data was used. The findings indicated that board diversity and financial performance of government-owned sugar manufacturing companies. In addition, board independence and financial performance of government-owned sugar manufacturing companies was also significant. Board Size had a positive but insignificant relationship with financial performance of government-owned sugar manufacturing companies in Kenya. Firm attributes had no significant moderating effect on the relationship between board characteristics and financial performance of government-owned sugar manufacturing companies. The study recommended that the board members should consist of at least half gender diversity of the board members as determined by the board based on the requirements stipulated by the trade authority. Further, the study recommended that the board members must be independent directors, and their independence should be continuously maintained and reviewed at least annually. Keywords: Board Diversity, Board Independence, Board Size, Firm Attributes & Financial Performance