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This study looks at board governance in Ontario hospitals.

We conducted a research of the hospitals’ websites and a survey of board directors to study the board structure and examine governance practice in Ontario hospitals.

The findings suggest that the board structure and process in Ontario hospitals are in compliance with Accreditation Canada’s Governance Standards, and such administrative controls are appropriate. Ontario hospital boards, in general, have fulfilled their key functions of governance in terms of working as an effective board; developing a clear direction; supporting the organization to achieve its mandate; maintaining positive relationships with external stakeholders; and being accountable and achieving sustainable results. Building knowledge through information is an area where improvement is needed.

Ontario hospitals have implemented appropriate administrative controls in terms of board composition and committee structure. The results of a survey of 99 board directors from over 25 hospitals suggest that directors, in general, have a good understanding of their governance role and relationship with senior management as well as the government. The findings are also supportive of good governance practice where executives manage and nonexecutive directors monitor the performance of the executives. According to the respondents, Ontario’s hospital boards are actively involved in setting the mission, strategic goals and objectives of their organizations, and they take appropriate steps to ensure that risk management, client safety, and quality improvements are incorporated in their governance and strategic planning process. In order to discharge their fiduciary duty effectively, respondents would like to have more information from different sources. This is an area where management accounting professionals can become involved such that relevant information from a variety of sources, especially external sources, are provided to board directors for decision making.

Ontario’s hospital sector has undertaken initiatives through research and publications to promote good governance practice. Such leadership is critical to ensure that directors have the competence and skills to discharge their duties and responsibilities diligently. Hospital boards should focus on renewal while ensuring that board directors are equipped for the challenging task of governing through professional development and continuing education.

Limitations related to the use of questionnaire applies to this research study. Self-selection bias and low response rate limit the generalizability of the findings. Future research can examine the behavior of directors in the boardroom and the impact of governance variables on hospital performance, such as quality of care and patient safety.

Purpose – The relationship between the board characteristics (i.e. board independence, CEO duality, board size, board meeting and board tenure) and the ownership structure (i.e. managerial ownership, family ownership and institutional ownership) and earnings quality is examined.

Design/methodology/approach – Data from 280 non-financial companies listed on Bursa Malaysia's Main Board for the year 2004 is used.

Findings – Significant association was found between board tenure and earnings quality. In addition, a positive significant association was found between outside board ownership and family ownership and earnings quality. However no significant relationship was found between board of directors’ independence and earnings quality.

Research limitations/implications – The association between audit committees’ characteristics and earnings quality was not examined. An examination of the impact of ownership structure on boards of directors and audit committees is warranted. An investigation of the impact of the ownership structure on earnings quality in Malaysia using separate test on family-controlled and non-family-controlled firms is suggested.

Practical implications – The appropriateness of policy directives requiring majority independent directors may be considered by policy makers.

Originality/value – The conflict of interest between outside shareholders and managers in a diffused ownership support the agency theory. However, utility of agency theory to explain the conflicts between the controlling owners and the minority shareholders where ownership concentration is prevalent is limited. Whilst demonstrating the dominant impact of ownership structure on earnings quality in Malaysia the study calls for alternative explanations of corporate governance practices in different institutional settings.

Representation of women on boards is getting more and more attention these recent years (Hillman, Shropshire, & Cannella, 2007; Nielsen & Huse, 2010), all the more as recent influence by the legislator accelerates the pace of change. Indeed, in France, a new law adopted in January 2011 stated that the proportion of female directors should not be lower than 40% in all major companies.

Most previous research focused on the impact of the presence of women in boards on performance, but there are few studies on female directors' networks. In order to help to better understand the ties at the origin of these networks, we study several characteristics and network ties of female directors of French companies belonging to the SBF 120 index and we compare them with male characteristics. We test the specificity of four types of board of directors' networks: attendance at the same elite educational institutions, use of business networks, civil servants' networks, and interlocking directorates.

Our findings suggest that female directors' networks tend to find their origin in business networks more than men. Conversely, male directors have more board interlocking and are more often graduated from elite schools than women. These results show that female directors' networks have specific origins in comparison with men's ones. The exploration of this specificity could be an asset to better understand the role and influence of female directors' networks in governance.

In this chapter, we explore the legal framework of AGMs in seven Member States (Austria, Belgium, Germany, France, Ireland, the Netherlands, and the United Kingdom) of shareholder decision-making rights. We find that, since only a small part of the decision-making rights is harmonized at the European level, there are numerous differences in shareholder rights among national laws. These decision-making rights are usually about the topics director (re-)elections, pay matters, share capital, amendments to articles of association, annual accounts, etc. To be able to conduct empirical research in the remaining chapters, we develop a categorization framework of 15 voting items.

This study uses cross-border mergers as a test of the ability of foreign directors to provide effective strategic advising. We find that firms with foreign directors on their boards are more likely to engage in cross-border mergers, pursue a higher number of cross-border mergers, and invest more in those mergers. We further determine that firms with foreign directors are more likely to undertake nondiversifying mergers, enjoy friendly mergers, and acquire privately held targets. Moreover, we find that firms with foreign directors have higher announcement period returns and pay less for their cross-border targets.

The purpose of this general review is to enhance understanding of the importance of a corporation’s whole ethics of governance regime and the connection to governance practices. This connection is often missing from corporate governance discussion. There is need for better business community awareness of a well-developed ethics of governance regime guiding appropriate board structure and composition choices subject to firm age and size, understanding of how these choices evolve as the firm matures and grows, plus the benefits from more emphasis in this area for company director training and development. This paper synthesises the theoretical and empirical insight from the ethics and corporate governance literatures to give guidance on best practice for large, medium size and small stock exchange listed companies. This synthesis of the literature evidences that the preferred Australian Institute of Company Directors agency theory prescription for a corporate board is not always optimal. In terms of practical implications advice is given on sound choices on board composition, director selection, plus director training and development that will give the best probability of effective board decisions and strong firm performance – this is not ‘one size fits all’ corporations advice. Future research should focus on whole ethics of governance regimes and governance practices in place for companies that have succeeded compared with companies that have failed. This will improve understanding in this area. This is a substantial future research agenda item as deeper knowledge of this contrast may add significantly to understanding of corporate success and failure.

To explore the importance of the board of director nomination process (that is, who nominates a given director for a position on the firm’s board) for the voting outcomes, disciplining of management, and overall monitoring quality of the board of directors.

We exploit a recent regulation passed by the US Securities and Exchange Commission (SEC) requiring disclosure of the board nomination process. In particular, we focus on firms’ use of executive search firms versus allowing internal members (often simply the CEO) to nominate new directors to serve on the board of directors.

We show that companies that use search firms to find board members pay their CEOs significantly higher salaries and significantly higher total compensations. Further, companies with search firm-identified independent directors are significantly less likely to fire their CEOs following negative performance. In addition, companies with search firm-identified independent directors are significantly more likely to engage in mergers and acquisitions (M&A) and see abnormally low returns from this M&A activity. We instrument the endogenous choice of using an executive search through the varying geographic distance of companies to executive search firms. Using this instrumental variable framework, we show search firm-identified independent directors’ negative impact on firm performance, consistent with firm behavior and governance consequences we document.

Given the recent law passage, we are the first to directly analyze the nomination process, and show a surprisingly large predictive effect of seemingly arm’s-length nominations. This has clear implications for thinking carefully through how independence is defined in the director nomination process.

The chapter aims to analyse the influence of the board of directors on transparency and integrity in hybrid organisations like state-owned enterprises. The effect of several characteristics of directors on the board’s effectiveness was assessed. The empirical analysis was based on 60 Italian listed and non-listed state-owned enterprises. Each enterprise’s website was individually examined and coded to obtain two self-constructed indexes on transparency and integrity, and a regression model was created to test the hypotheses.

The ‘knowledge structure’ of interlocking directors and board compensation were found to be both positively related to the level of commitment among state-owned enterprises to transparency and integrity. Skill and gender diversity on the board had no significant impact. The analysis used data from a one-year period but dealt with hidden and complex phenomena like corruption. Future longitudinal studies and qualitative approaches would provide more comprehensive insights into the relationship between the board of directors, transparency and integrity over time.

Policymakers and all those involved in the appointment of directors to state-owned enterprises should be aware that some features of board members may affect the levels of organisational transparency and integrity. The chapter contributes to the literature on governance of state-owned enterprises, emphasising the board’s role and its effectiveness in sustaining transparency and integrity.

Large companies are the dominant forms of wealth creation in society today. As well as providing jobs and export income, they are key influences on social cohesion. We ignore how companies are run at a peril to us all. However, today investors are increasingly concerned about the ethical behaviour of those who run companies. Regular disclosures that directors and executives have behaved unethically reflect badly on the corporate sector as a vehicle for investor funds. By comparison, Australian company directors are increasingly stating that there is already too much concentration on the mechanisms of corporate governance, indicating that they will happily tick the boxes, but do little more.

In the latter part of the 20th century, companies discovered mission. The key elements of any mission must include the major corporate participants – investors, suppliers, customers, employees and society. The role of management is to develop a structure that can operationalise the mission. Such an approach puts ethics – how we treat other people – at the core of a company's activities. Trust is a critical element in how the interests of these stakeholders are taken up in decision-making and embedded in strategy, plans and action on the ground.

In the aftermath of significant corporate collapses in the 1980s and then again at the start of this century, companies also discovered corporate governance. According to the much referenced Cadbury Committee in the U.K., corporate governance is the system by which companies are directed and controlled, i.e., a the system of checks and balances for effective resolution of conflicts and control over the exercise of managerial power.

This paper suggests that an alternative “professional” approach to governance is likely to be more effective. Today, the role of management is to “add value” and contribute to the “good” of society. This good is the collective set of stakeholder interests entrusted to the governing board to look after. A governance model that integrates the human good with the operations of ‘mind’ in terms of learning and leadership highlights eight distinctive “products,” the eighth being valued products and by-products delivered to each stakeholder. The model is structured around the person's capacity to ask four categories of questions, including those that provide orientation and direction.

The model is used to examine a contemporary governance issue experienced by the board of directors at the National Australia Bank Limited.

I test empirically the hypothesis that the monitoring role of the board of directors depends on the severity of the agency problems and the amount of information needed to monitor. I show that in high growth firms, where the agency conflicts are low and managers are likely to reveal more information to get advice, boards are more independent but less likely to monitor, while in low growth firms, boards are less likely to be independent, but the relationship between firm value and board independence is strong. Overall, boards become more independent but monitor less as firms’ growth opportunities increase, suggesting that managers trade off the amount of information released to the board to get a better advice and to mitigate the monitoring role of the board.