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Article
Publication date: 30 June 2021

Mohammed Bajaher, Murya Habbash and Adel Alborr

This paper aims to examine whether board governance mechanisms and ownership structure play a role in foreign investors’ decisions when buying shares in Saudi listed companies

Abstract

Purpose

This paper aims to examine whether board governance mechanisms and ownership structure play a role in foreign investors’ decisions when buying shares in Saudi listed companies

Design/methodology/approach

Foreign investment in the Saudi capital market started in 2015 and reached a peak in 2019, with corporate governance regulations having been updated in 2017. The authors tested the proposed relationships using hand collected data for all Saudi non-financial firms in 2019.

Findings

This study found that it does not play a role in attracting foreign investment in the Saudi capital market. Foreign investors also seem to avoid firms with concentrated ownership that either have high government or director ownership; however, accounting and market variables show significant impact on foreign investors' decisions. The outcomes of this study provide empirical evidence that current foreign investors in the Saudi stock market do not place enough merit on board governance and their investment decisions tend to depend on share performance. Thus, the results show that the current governance changes and capital market regulations in Saudi Arabia may not have been sufficient to stimulate the inflow of institutional foreign investment to the country to date, but rather they have attracted individual retail foreign investors.

Originality/value

This empirical study is one of only a small number of studies to investigate the impact of internal corporate governance on foreign ownership in developing countries and the first in the Saudi context. In fact, most previous governance research in Saudi Arabia focused on how board governance and ownership structure influences firm performance. A review of the prior studies found that only Badawi et al. (2019) examined the determinants of foreign ownership among Saudi listed firms. Thus, the present investigation extends that study by examining the role of board governance in attracting foreign investors.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

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Book part
Publication date: 19 July 2014

Alessandro Hinna, Ernesto De Nito, Gianluigi Mangia, Danila Scarozza and Andrea Tomo

In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the…

Abstract

Purpose

In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the behavioural perspective on studying public boards. Aiming to fulfil this gap this paper offers a review of the international literature addressing boards behaviour within the unique organizational setting of public sector.

Design/methodology/approach

Considering as behavioural studies those publications focusing on actors, processes, decision-making, relationships and interaction inside and outside the boardroom, 91 papers were analysed. Adopting the framework provided by Huse (2007), the papers are classified following four behavioural dimensions/blocks which are crucial to understand board dynamics: board members, interactions, structures and leadership, decision-making culture.

Findings

The literature review shows the increasing production – in the last years – on the theoretical issues related to the behavioural perspective in public governance literature. The most relevant part of these contributions addresses the theoretical dimensions of the board member’s characteristics and of structural leadership.

Originality/value of the chapter

The manuscript reveals the need to adopt a more organizational approach for studying the behavioural categories and levels of analysis proposed by public governance literature. Moreover, the article evidences some possible directions for future research that might further contribute to enrich the ‘behavioural governance perspective’ in public organizations.

Details

Mechanisms, Roles and Consequences of Governance: Emerging Issues
Type: Book
ISBN: 978-1-78350-706-1

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Book part
Publication date: 12 February 2013

Luca Gnan, Alessandro Hinna and Danila Scarozza

Purpose – Starting from public and corporate governance literature, the chapter aims to evidence the opportunity in exploring board of directors in public organisations…

Abstract

Purpose – Starting from public and corporate governance literature, the chapter aims to evidence the opportunity in exploring board of directors in public organisations, where the focus is on a behavioural perspective.Design/methodology/approach – Presenting two levels of analysis: (a) the relationship between the board and ‘external’ stakeholders, and (b) the relationship between the board and managers, a framework is proposed evidencing which factors (variables, constructs and concepts) logically should be considered as part of the explanation of boards’ role in public organisations’ innovation.Findings – The chapter provides support for a board model in public governance, evidencing both the opportunity to assume a multi-paradigm perspective and the existing similarities and differences between boards in public and corporate governance approach. It is possible, for example, to empirically apply the framework both to different national context and to different levels of public organisations.Originality/value of chapter – The chapter presents theoretical perspectives on governance research, and both some pioneer studies in public sector research and some of the major contribution in corporate governance studies. All of them have been put together, introducing a new stream of research in the debate on the micro (organisational) level of governance in public sector.

Details

Conceptualizing and Researching Governance in Public and Non-Profit Organizations
Type: Book
ISBN: 978-1-78190-657-6

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Book part
Publication date: 26 June 2013

Yee-Ching Lilian Chan

This study looks at board governance in Ontario hospitals.

Abstract

Purpose

This study looks at board governance in Ontario hospitals.

Methodology/approach

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.

Findings

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.

Research implications

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.

Practical implications

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 and future research

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.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78190-842-6

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Article
Publication date: 6 November 2020

Joy Tweed and Louise M. Wallace

The purpose of the study is to examine how Non-Executive Directors (NEDs) in the English National Health Service (NHS) commissioning bodies experienced their role and…

Abstract

Purpose

The purpose of the study is to examine how Non-Executive Directors (NEDs) in the English National Health Service (NHS) commissioning bodies experienced their role and contribution to governance.

Design/methodology/approach

Semi-structured interviews were conducted with a purposive sample of 31 NEDs of Primary Care Trusts (PCTs) and 8 Clinical Commissioning Group (CCG) NEDs. Framework analysis was applied using a conceptualisation of governance developed by Newman, which has four models of governance: the hierarchy, self-governance, open systems and rational goal model.

Findings

NEDs saw themselves as guardians of the public interest. NEDs’ power is a product of the explicit levers set out in the constitution of the board, but also how they choose to use their knowledge and expertise to influence decisions for, as they see it, the public good. They contribute to governance by holding to account executive and professional colleagues, acting largely within the rational goal model. CCG NEDs felt less powerful than in those in PCTs, operating largely in conformance and representational roles, even though government policy appears to be moving towards a more networked, open systems model.

Originality/value

This is the first in-depth study of NEDs in English NHS local commissioning bodies. It is of value in helping to inform how the NED role could be enhanced to make a wider contribution to healthcare leadership as new systems are established in the UK and beyond.

Details

Journal of Health Organization and Management, vol. 35 no. 1
Type: Research Article
ISSN: 1477-7266

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Article
Publication date: 2 October 2020

Javed Khan and Shafiq Ur Rehman

This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed…

Abstract

Purpose

This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed non-financial firms. The study further tests how these relationships vary in the pre- and post-corporate governance reforms.

Design/methodology/approach

Fixed-effect regression model is used on 10 years panel data from 2007 to 2016 for a sample of 170 firms listed on the Pakistan Stock Exchange. Two-stage least squares model is used for addressing the endogeneity problem.

Findings

The findings reveal that governance compliance and governance reforms negatively affect operating liquidity. Among the board attributes, board meetings, directors’ remuneration, board foreign diversity and board gender diversity are significantly related to operating liquidity. Further exploration indicates that internal governance mechanisms are less effective to safeguard shareholders from expropriation during weak external governance. This suggests that strong external governance is inevitable to the effectiveness of internal governance mechanisms. Overall, the study findings support the agency theory.

Practical implications

The findings provide valid recommendations to policymakers interested in safeguarding the investors to focus on macro-level governance for making the micro-level governance effective. Further, the results provide the executives with an insight to improve the compliance level with the code of corporate governance.

Originality/value

Unlike prior studies, this study examines the impact of corporate governance compliance and novel board attributes – directors’ attendance at board meetings, number of board committees, directors’ remuneration and board foreign diversity on operating liquidity. Further, the study subdivides its sample period into pre- and post-corporate governance reforms to examine how external governance influences internal governance effectiveness.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 7
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 4 September 2020

Amira Jamil, Nazli Anum Mohd Ghazali and Sherliza Puat Nelson

Following the introduction of the revised Malaysian Code on Corporate Governance in 2012 (MCCG 2012), this study aims to investigate the influence of corporate governance

Abstract

Purpose

Following the introduction of the revised Malaysian Code on Corporate Governance in 2012 (MCCG 2012), this study aims to investigate the influence of corporate governance structure on the quality of sustainability reporting from the perspectives of agency theory and resource dependence theory.

Design/methodology/approach

Based on an analysis of 126 firms’ annual reports for the year ended 2010 and 2014, this study analyses sustainability reporting quality before the introduction of MCCG, 2012 (year ended 2010) and after (year ended 2014).

Findings

The findings of the study show that there was a significant increase in the quality of sustainability reporting from 2010 to 2014. Results from multiple regression analyses indicate that the number of sustainability-related training attended by the board of directors and the percentage of directors with sustainability-related experience have a significant impact on the quality of sustainability reporting.

Practical implications

Observations from the study provide useful insights into the importance of the appointment of directors with sustainability-related experience as part of the criteria for directors’ appointment. Moreover, the board of directors is encouraged to attend sustainability-related training to help firms improve sustainability practices and reporting.

Social implications

The increase in the quality of sustainability reporting indicates that companies are committed in ensuring that environmental degradation is put at the minimum level if not eliminated. It appears that companies are embracing the concept of sustainability reporting, and hence, contributing to improving and enhancing social well-being.

Originality/value

This study contributes to the discussion of both internal mechanisms (board independence and board capital) and external mechanisms (compliance to the code on corporate governance) of corporate governance structure on the quality of sustainability reporting. The findings can be used to identify necessary mechanisms that should be enhanced to strengthen the practice of sustainability reporting.

Details

Social Responsibility Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 14 February 2020

Alison Brown

The importance of hospital board engagement in the work of governing healthcare quality has been demonstrated in the literature. Research into influences on effective…

Abstract

Purpose

The importance of hospital board engagement in the work of governing healthcare quality has been demonstrated in the literature. Research into influences on effective corporate governance has traditionally focused on board architecture. Emerging research is bringing to light the importance of governance dynamics. This paper contributes to emerging research through highlighting how communication and leadership underpin effective engagement in governing healthcare quality.

Design/methodology/approach

A comparative case study of eight Australian public hospitals was undertaken involving document review, interviews and observations. Case studies were allocated into high- or low-engagement categories based on evidence of governance processes being undertaken, in order to compare and contrast influencing factors. Thematic analysis was undertaken to explore how communication and leadership influence healthcare governance.

Findings

Several key components of communication and leadership are shown to influence healthcare quality governance. Clear logical narratives in reporting, open communication, effective questioning and challenge from board members are important elements of communication found to influence engagement. Leadership that has a focus on healthcare excellence and quality improvement are aligned and promote effective meeting processes is also found to foster governance engagement. Effective engagement in these communication and leadership processes facilitate valuable reflexivity at the governance level.

Practical implications

The findings highlight the way in which boards and senior managers can strengthen governance effectiveness through attention to key aspects of communication and leadership.

Originality/value

The case study approach allows the exploration of communication and leadership in greater depth than previously undertaken at the corporate governance level in the healthcare setting.

Details

Journal of Health Organization and Management, vol. 34 no. 2
Type: Research Article
ISSN: 1477-7266

Keywords

Content available
Article
Publication date: 16 January 2017

Collins G. Ntim, Teerooven Soobaroyen and Martin J. Broad

The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal…

Abstract

Purpose

The purpose of this paper is to investigate the extent of voluntary disclosures in UK higher education institutions’ (HEIs) annual reports and examine whether internal governance structures influence disclosure in the period following major reform and funding constraints.

Design/methodology/approach

The authors adopt a modified version of Coy and Dixon’s (2004) public accountability index, referred to in this paper as a public accountability and transparency index (PATI), to measure the extent of voluntary disclosures in 130 UK HEIs’ annual reports. Informed by a multi-theoretical framework drawn from public accountability, legitimacy, resource dependence and stakeholder perspectives, the authors propose that the characteristics of governing and executive structures in UK universities influence the extent of their voluntary disclosures.

Findings

The authors find a large degree of variability in the level of voluntary disclosures by universities and an overall relatively low level of PATI (44 per cent), particularly with regards to the disclosure of teaching/research outcomes. The authors also find that audit committee quality, governing board diversity, governor independence and the presence of a governance committee are associated with the level of disclosure. Finally, the authors find that the interaction between executive team characteristics and governance variables enhances the level of voluntary disclosures, thereby providing support for the continued relevance of a “shared” leadership in the HEIs’ sector towards enhancing accountability and transparency in HEIs.

Research limitations/implications

In spite of significant funding cuts, regulatory reforms and competitive challenges, the level of voluntary disclosure by UK HEIs remains low. Whilst the role of selected governance mechanisms and “shared leadership” in improving disclosure, is asserted, the varying level and selective basis of the disclosures across the surveyed HEIs suggest that the public accountability motive is weaker relative to the other motives underpinned by stakeholder, legitimacy and resource dependence perspectives.

Originality/value

This is the first study which explores the association between HEI governance structures, managerial characteristics and the level of disclosure in UK HEIs.

Details

Accounting, Auditing & Accountability Journal, vol. 30 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 6 May 2014

Thomas A. Hemphill and Gregory J. Laurence

Robert C. Pozen, Chairman Emeritus of MFS Investment Management and a long-time scholar of corporate governance, has proposed a model of professional board directorship…

Abstract

Purpose

Robert C. Pozen, Chairman Emeritus of MFS Investment Management and a long-time scholar of corporate governance, has proposed a model of professional board directorship that responds to the three main factors he believes underpin ineffective board decision making: the large size of boards; the lack of specific industry expertise; and inadequate director time commitment. The paper aims to discuss these issues.

Design/methodology/approach

The authors critically evaluate the efficacy of Pozen's proposed corporate governance model, addressing the three main factors underpinning ineffective board decision making.

Findings

A professional board consisting of retired executives with industry-specific expertise is vulnerable to a groupthink mentality, as well as to the availability of such individuals for board directorship seats. Moreover, while industry-specific expertise is a desired attribute of an independent board director, there are other attributes that firms are looking for, including international, regulatory/governmental, risk, technology, and marketing expertise. Lastly, Pozen's recommendations to reduce board size to seven members, as well as increasing the number of hours that independent directors spend on board-related activities (and commensurate compensation received), should be seriously considered as potential value-adding, corporate governance improvements.

Originality/value

The authors critically evaluate a corporate governance model that, based on director-related issues arising from the recent global financial crisis, has resurrected the concept of a “professional board” of directors. The authors utilize state-of-the-art academic literature from the fields of corporate governance and organizational behavior to evaluate the merits and de-merits of the proposed corporate governance model, and present their findings (and recommendations) for improvements in corporate governance practices.

Details

International Journal of Law and Management, vol. 56 no. 3
Type: Research Article
ISSN: 1754-243X

Keywords

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