Search results

1 – 10 of over 18000
Article
Publication date: 1 February 2004

Olof Brunninge and Mattias Nordqvist

The purpose of this article is to investigate how ownership structure, especially family and/or venture‐capital involvement, as well as entrepreneurial activities, defined as…

4425

Abstract

The purpose of this article is to investigate how ownership structure, especially family and/or venture‐capital involvement, as well as entrepreneurial activities, defined as strategic change and renewal, help explain the involvement of independent members on boards of directors. The CEOs of 2,455 small and medium‐sized, private enterprises from practically all industries were contacted in a telephone survey, resulting in an exceptionally high response rate. The findings reveal that family firms are more reluctant to involve independent directors on their boards than non‐family firms, that presence of venture capitalists increases the frequency of independent board members and that ownership has an impact on board roles. The results do not support the hypothesised relationship that independent directors enhance entrepreneurial activities. One implication of our study is that the often‐argued‐for strategic contribution of outsiders to the boards in family firms may be overemphasised. Another implication is that family firms that choose to acquire additional capital should be aware that this could result in a change in the board composition and the loss of control of the business. However, new and external owners' inclusion on the board seems to be negotiable since there are also venture capitalists that do not insist on board representation.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 10 no. 1/2
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 3 November 2020

Vidya Sukumara Panicker and Rajesh Srinivas Upadhyayula

This paper attempts to examine the activity and involvement of board of directors in internationalization activities of firms in emerging markets, by evaluating the resource…

Abstract

Purpose

This paper attempts to examine the activity and involvement of board of directors in internationalization activities of firms in emerging markets, by evaluating the resource provisioning roles of interlocks provided by board of directors, and the frequency of board meetings. We demonstrate that the effectiveness of board involvement is contingent upon the levels of family ownership in firms since family ownership could impact the firm’s ability to utilize the presence of different types of board members.

Design/methodology/approach

The authors test our hypotheses on a sample of listed Indian companies, extracted from the Prowess database published by the Centre for Monitoring Indian Economy (CMIE), a database of the financial performance of Indian companies. On a panel of 3,133 firm years of 605 unique Indian firms with foreign investments, over a time period of 2006–2017, the authors apply different estimation techniques.

Findings

The results demonstrate that both board meeting frequency and director interlocks are instrumental in supporting internationalization activities in emerging market firms. However, family ownership moderates the role of insider and independent interlocks on internationalization investments in different ways; the authors find that interlocks provided by independent directors support internationalization activities in family firms, whereas those provided by insider directors do not. Further, the study also finds that board meetings are less effective in internationalization of family firms.

Practical implications

The authors conclude that family firms aiming at international diversification require to develop more connected and networked independent directors to enable internationalization in firms. While independent director interlocks enhance the international investments, it is also useful to know that board meetings are ineffective in utilizing the resources in family firms. This points to the possibility that family firms should device mechanisms to integrate family meetings with board meetings so that they can utilize the within-family processes to aid in their internationalization decisions.

Originality/value

The study contributes to resource dependence theory by understanding its limiting role in family firms. Theoretically, it helps delineate the limiting resource provision role of the insider directors vis-à-vis independent directors. The authors argue that the resource provision role of insider director interlocks does not effectively help in internationalization in comparison to independent director interlocks in family-dominated firms. Consequently, the study shows the limiting role of resource provision and utilization by family-owned firms in comparison to non-family-owned firms.

Details

Cross Cultural & Strategic Management, vol. 28 no. 2
Type: Research Article
ISSN: 2059-5794

Keywords

Article
Publication date: 9 January 2020

Chaminda Wijethilake and Athula Ekanayake

This study aims to draw on the resource dependence theory to synthesize the conflicting arguments as well as commonalities of the agency and stewardship perspectives on the…

1939

Abstract

Purpose

This study aims to draw on the resource dependence theory to synthesize the conflicting arguments as well as commonalities of the agency and stewardship perspectives on the relationship between CEO duality and firm performance.

Design/methodology/approach

Multiple regression analysis is used to analyze the data collected from a sample of 212 large-scale publicly listed companies representing 20 sectors in the Colombo Stock Exchange in Sri Lanka.

Findings

The research results based on all of 212 publicly listed companies in Sri Lanka show, in support of the agency theory, that CEO duality exerts a negative effect on firm performance when the CEO is equipped with additional informal power. Conversely, CEO duality exhibits a positive effect on firm performance when board involvements are high, a finding that supports the commonalities of the agency and stewardship theoretical perspectives.

Practical implications

By examining the governance practices and concepts in an Asian developing economy, this study provides insight into the power dynamics between the CEO and the board of directors in managerial contexts that are largely different from those in western countries.

Originality/value

This study expands the theoretical underpinning of corporate governance research by identifying the performance implications of CEO duality within the broad context of the resource provision of the board of directors and the informal power of CEOs.

Details

Social Responsibility Journal, vol. 16 no. 8
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 10 August 2015

Chaminda Wijethilake, Athula Ekanayake and Sujatha Perera

The purpose of this paper is to provide insights into the understanding of the relationship between board involvement and corporate performance within the context of developing…

1353

Abstract

Purpose

The purpose of this paper is to provide insights into the understanding of the relationship between board involvement and corporate performance within the context of developing countries.

Design/methodology/approach

A number of aspects related to board involvement, including board’s shareholdings, frequency of board meetings, availability of independent board committees, board size, CEO duality, and CEO is being a promoter, were examined in order to explore their influence on corporate performance measured in terms of earnings per share. The study mainly draws on agency theory, and is supplemented by resource dependence and stewardship theories. Multiple regression analysis is utilized to analyze the data gathered from a sample of 212 publicly listed companies in 20 industries in the Colombo Stock Exchange in Sri Lanka.

Findings

Among the aspects of board involvement considered, board’s shareholdings, board meetings frequency, independent committees, and CEO duality showed a positive influence on corporate performance. However, two other aspects, namely CEO being a promoter, and the size of corporate boards showed a negative effect. The findings also suggest that the use of multiple theories, rather than depending on a single theory, is more effective in understanding the relationships examined in this study. Further, the study highlights the need to be cautious in utilizing the theories that are more applicable to matured western economies when analyzing issues relating to developing countries.

Originality/value

This study makes an original contribution to corporate governance literature by examining the relationship between board involvement and corporate performance in a developing country, namely Sri Lanka. The study also adds to the existing literature by utilizing multiple theories to examine the issue under investigation.

Details

Journal of Accounting in Emerging Economies, vol. 5 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 13 May 2014

Fariss-Terry Mousa, William J. Ritchie and Richard Reed

The purpose of this paper is to extend governance research in the small business context by examining the moderating influence of top executive involvement on the board of

Abstract

Purpose

The purpose of this paper is to extend governance research in the small business context by examining the moderating influence of top executive involvement on the board of directors on market valuation.

Design/methodology/approach

Drawing on a sample of initial public offering (IPO) high-tech firms engaged in late-stage funding, the study uses stepwise regression to test board involvement moderation effects.

Findings

Primary market investors reward governance structures that limit founder power.

Originality/value

The current study introduces the notion that optimal market valuation depends not only on whether a CEO-founder governs the firm, but also on level of involvement on the board of directors.

Details

Management Decision, vol. 52 no. 3
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 15 June 2010

Dimitrios N. Koufopoulos, Ioannis N. Lagoudis, Ioannis N. Theotokas and Theodoros C. Syriopoulos

Corporate governance is an area of interest to researchers, stakeholders and the general public. In recent times, there has been an increased concern about the effectiveness of

2369

Abstract

Purpose

Corporate governance is an area of interest to researchers, stakeholders and the general public. In recent times, there has been an increased concern about the effectiveness of the board within corporate organizations due to corporate scandals and accounting irregularities of some well known firms, which highlighted the inefficiency of monitoring corporate boards and the overseeing of managerial decision making. This paper aims to investigate the effects that a number of factors such as organisational demography, organisational size, ownership type, board size, CEO duality and CEO dependence/independence have on board configuration.

Design/methodology/approach

The paper reviews the literature on organisational demography and board structure characteristics. Primary data were gathered from 27 management shipping companies having their head office in Greece.

Findings

Findings show high levels of influence of the CEOs on the Board of Directors, since in most cases the CEO is the Chairman of the Board and high levels of control asked by the top management teams in almost all strategic decision processes.

Originality/value

The paper's contribution lies primarily on investigating issues relating to corporate governance in an extremely dynamic, highly extrovert, truly international and at the same time family owned sector; the shipping industry.

Details

Corporate Governance: The international journal of business in society, vol. 10 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 1 April 2003

Roberto Pascual and Martí Larraza‐Kintana

The control role of the Board of Directors is aimed at monitoring the decisions and actions undertaken by managers in order to protect stockholders’ interests. Considerable…

Abstract

The control role of the Board of Directors is aimed at monitoring the decisions and actions undertaken by managers in order to protect stockholders’ interests. Considerable theoretical and empirical research has analyzed whether directors’ behavior is consistent with their fiduciary responsibility, but this research has reported inconsistent findings. This paper offers a comprehensive review of both theoretical and empirical literature on the control role of the board and suggests several guidelines for future research.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 1 no. 1
Type: Research Article
ISSN: 1536-5433

Keywords

Article
Publication date: 1 October 1999

Chandra S. Mishra and James F. Nielsen

Outlines previous research on the links between board composition, firm performance and chief executive officer (CEO) compensation, and presents a study of CEO pay‐performance…

1596

Abstract

Outlines previous research on the links between board composition, firm performance and chief executive officer (CEO) compensation, and presents a study of CEO pay‐performance sensitivity, board independence and performance in the US banking industry. Explains the methodology and presents the results, suggesting that for large bank holding companies with average performance, increased board independence reduces pay‐performance sensitivity because internal monitoring is sufficient without extra alignment incentives. Adds that when performance is poor this no longer holds true and compensation contracts are then used to align the interests of managers and shareholders.

Details

Managerial Finance, vol. 25 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 11 September 2018

Bazeet Olayemi Badru, Nurwati A. Ahmad-Zaluki and Wan Nordin Wan-Hussin

The purpose of this paper is to examine whether the differences in men and women, such as risk aversion in decision making, can influence the amount of capital that the board of

Abstract

Purpose

The purpose of this paper is to examine whether the differences in men and women, such as risk aversion in decision making, can influence the amount of capital that the board of directors can allocate for investment opportunities.

Design/methodology/approach

This study sampled 212 IPOs over the period of 2005–2015 and employed the OLS and the quantile regression techniques to examine the impact of female directors on capital allocation.

Findings

The results show that women on corporate boards have a positive influence on the amount of capital an IPO company can allocate for investment opportunities. These findings suggest that the investment strategies of women in an emerging financial market, like Malaysia, may differ from women in other financial markets.

Practical implications

The presence of women on corporate boards plays an important role in board involvement in a company’s strategic decision at the time of the IPO. Therefore, regulators and IPO issuers should pay close attention to the corporate governance structure of a company at the time of an IPO. In addition, investors and other stakeholders of a company may consider women on corporate boards as an important factor in financing and investment decisions.

Originality/value

Despite several studies that have examined the influence of women on corporate boards on corporate outcomes, globally, the presence of women on corporate boards and their influence on corporate decision-making related to allocation of capital to investment opportunities, have not been fully explored in the IPO literature.

Details

Management Decision, vol. 57 no. 3
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 4 April 2016

Sudha Mathew, Salma Ibrahim and Stuart Archbold

The purpose of this paper is to identify the board attributes that significantly increase firm risk. The study aims to find whether board size, percentage of non-executive…

1614

Abstract

Purpose

The purpose of this paper is to identify the board attributes that significantly increase firm risk. The study aims to find whether board size, percentage of non-executive directors, women on the board, a powerful chief executive officer, equity ownership amongst executive board directors and institutional investor ownership are associated with firm risk. This is the first study that examines which board attributes increase firm risk using a UK-based sample.

Design/methodology/approach

This empirical study collected secondary data from Bloomberg and Morningstar databases. The data sample is an unbalanced panel of 260 companies’ secondary data on FTSE 350 index in the UK, from 2005 to 2010. The data were statistically analysed using STATA.

Findings

The study establishes the board attributes that were significantly related to firm risk. The results show that a board which can increase firm risk is one that is small in size, has high equity ownership amongst executive board directors and has high institutional investor ownership.

Research limitations/implications

The governance culture and regulatory system in the UK is different from other countries. As the data are a UK-based sample, the results can lack generalisability.

Practical implications

The results are useful for investors who invest in large firms, to have the knowledge about the board attributes that can increase firm risk. Regulators can also use the results to strengthen regulatory guidelines.

Originality/value

This study fills the gap in knowledge in UK governance literature on the board attributes that can increase firm risk.

Details

Corporate Governance, vol. 16 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

1 – 10 of over 18000