BoD Structure and Corporate Governance Models

Corporate governance, the soul of every corporate body, is indispensable for the survival, growth, and development of any kind of organization. It has significant impact and influence in attaining the confidence of stakeholder. Good governance leads to instill the confidence of stakeholder. The significance of corporate governance has increased globally in past decades due to financial crises, technology advancement, liberalizations, emergence of financial markets, and liberalization of trade and capital mobilization. Corporate boards, academicians, legislators, and in all businesses, corporate governance are believed to be a mainstream concern in corporate structure.

Governance Practices and CEO Hubris

This chapter analyzes the connection between CEO hubris and corporate governance contingencies, including a case study of an Italian bank for which the state of financial distress shall be linkable also to bad governance. The main objective is to verify whether, in presence of hubristic CEO, the internal control mechanisms, set to ensure the board vigilance and limit the overconfidence of the leader, are implemented, and if so, whether such mechanisms, even when formally respected, may be not so appropriate to guarantee a good governance. Particularly, the existence of a CEO hubris could neutralize their positive expected balancing effects on the power dynamics between CEO and board, such as to give prevalence to substance over form. Therefore, it may occur that some governance mechanisms (e.g., independence, non-duality), even if formally implemented, are unable to stem the managerial entrenchment of the CEO, who succeeds in enhancing immoderately his substantial power in the decision-making process.

Family Business Governance

Corporate governance is a significant tool to build strong and long relationships among various stakeholders in kinds of business organizations. Family businesses are not an exception to this. Like any other businesses, family businesses also need to have governance in place and practice to achieve the business strategies and to have long-term succession. Family-owned businesses are the backbone of many countries' economies in the world contributing substantial portion of GDP. Considering these, it is important to know the best practices of governance in family owned business organizations and the role played by governance to improve the strengths of these businesses. The chapter throws light on family business governance and explores various important practices highlighting their advantages and disadvantages in detail.

Corporate Governance Mechanisms on the Internal Relations Between Managers and Subordinates

The concept of governance is as old as human civilization. However, recently the usage of this term has increased multifarious. A broader concept of corporate governance involves a set of relationships amongst the organization's stakeholders. A stakeholder is any person, organization, social group, or society at large that has a stake in the business. Recognizing the importance of corporate governance, most of the countries in the world have developed their own corporate governance mechanism known as corporate governance models. The mechanism of corporate governance depends upon various indigenous factors such as legal framework, regulatory framework, the pattern of shareholding, breadth, and depth of financial markets.

Gender Diversity

Gender diversity is a new and challenging issue of research in business. Women on boards are a heavily discussed topic in developed countries, though this issue has recently appeared to gain the attention of researchers in developing economies as well. However, research on gender diversity in Malaysia is limited. This study aims to examine whether female directors on boards can affect firm performance based on selected public listed companies in Malaysia. In examining the effect of gender diversity on firm performance, Pearson correlation coefficient and regression analysis tests are employed using economic value added (EVA) as a measurement tool. This study found no relationship between gender diversity and firm performance. Given this, future studies should try to consider other aspects of corporate governance.

Corporate Social Performance and Governance Quality Across the BRICS Countries

This chapter seeks to examine the level of corporate social performance of the BRICS companies and investigate the effect of the country's governance quality on the environmental, social, and governance (ESG) performance of the companies. Analysis of the BRICS companies' ESG scores for 2009 - 2018 indicated that the level of ESG performance in the BRICS countries differs from each other considerably. Overall, results of fixed effects regression analysis revealed that governance quality of countries has a positive effect on ESG scores of companies. Based on these findings, it was suggested to improve governance quality thereby encouraging companies to fulfill their social responsibilities.

Theoretical Disclosure of Board Independence

In the wake of corporate scandals in major companies like Enron, Tyco, and East Asian crisis have emphasized the need of sufficient number of independent directors on the board for proper oversight and functioning of the company. Code of corporate governance recommends the presence of independent directors for better performance of the company. As board independence ensured good corporate governance practices, it is considered that having independent directors on the board is not for better performance but for better governance. In seeking reasonable answer for these arguments, the purpose of this study is to review some of the literature of board independence with respect to corporate governance theories specifically agency theory, stewardship, and resource dependency theory. All these theories have provided mixed evidences in different studies about the impact and importance of board independence and reason behind these mixed evidences might be the institutional context of different organizations in different countries.

Corporate Citizenship

The last few decades have witnessed serious sustainability challenges such as economic uncertainty, depletion ozone layer, increase in pollution, urban decay, overpopulation, degradation, and shortage of natural resources, etc. The increasing pace of change and rising competition has posed unknown challenges and unparalleled pressure on the corporates not only to prosper, but also to sustain in future. With customers, investors, and other stakeholders becoming increasing aware and critical about sustainable practices, the companies are forced to think past short term monetary gains. As there exists an interdependence, integration, and co-creation among the three basic tenets of sustainability-people, planet, and profits. There is a global call on companies to pursue socially responsible conduct and adopt innovative practices which create value for people, planet, as well as economy.

Governance Structure Theories for Family Business

It is perceived by the authors that family ownership may be seen as an opportunity or a threat based on various factors. Ownership and commitment to business would definitely be able to address the concerns of the investor community. This is because of a better understating by the family in having a strategic approach to risk management. Therefore, all the more important to have the right governance conditions in place which reflects the positive aspects of family ownership. The author further states that in order achieve the said perspectives, there emanates a need for a design structure of governance to have a balance between family and business. Hence, it becomes all the more vital to define family values and have the involvement of each and every family member. The author further elucidates on the fact that it becomes imperative to improvise capital and ensure a proper leadership succession planning so that business continuity does not suffer.

Board Diversity and Its Effects on the Functionality of Boards in South Africa

The structure and composition of the board are determined by the characteristics of an organisation, its environment, and its information needs. If the role of the board is to advise and supervise, this then talks to the relationships that account for its composition so that it may carry out these duties. Boards of directors are now faced with a change in the priority of the functions that must be undertaken by them, with supervision and monitoring being more important than the usual function of administration. The chapter discusses the literature on board diversity, corporate governance, role of the boards of public entities, effectiveness of boards, role of board committees, strategic leadership theory, and the impact of board diversity on board effectiveness. In terms of practical implications, the chapter makes a unique and significant contribution to the functionality of board members in South Africa. The analysis may encourage board nomination committees to seek board diversity beyond the gender and ethnic characteristics of directors.